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he Main Idea One plus one makes three: this equation is the special alchemy of a merger or an acquisition.

The key principle behind buying a company is to create shareholder value over and above that of the sum of the two companies. Two companies together are more valuable than two separate companies - at least, that's the reasoning behind M&A. This rationale is particularly alluring to companies when times are tough. Strong companies will act to buy other companies to create a more competitive, cost-efficient company. The companies will come together hoping to gain a greater market share or to achieve greater efficiency. Because of these potential benefits, target companies will often agree to be purchased when they know they cannot survive alone. Distinction between Mergers and Acquisitions Although they are often uttered in the same breath and used as though they were synonymous, the terms merger and acquisition mean slightly different things. When one company takes over another and clearly established itself as the new owner, the purchase is called an acquisition. From a legal point of view, the target company ceases to exist, the buyer "swallows" the business and the buyer's stock continues to be traded. In the pure sense of the term, a merger happens when two firms, often of about the same size, agree to go forward as a single new company rather than remain separately owned and operated. This kind of action is more precisely referred to as a "merger of equals." Both companies' stocks are surrendered and new company stock is issued in its place. For example, both Daimler-Benz and Chrysler ceased to exist when the two firms merged, and a new company, DaimlerChrysler, was created. In practice, however, actual mergers of equals don't happen very often. Usually, one company will buy another and, as part of the deal's terms, simply allow the acquired firm to proclaim that the action is a merger of equals, even if it's technically an acquisition. Being bought out often carries negative connotations, therefore, by describing the deal as a merger, deal makers and top managers try to make the takeover more palatable. A purchase deal will also be called a merger when both CEOs agree that joining together is in the best interest of both of their companies. But when the deal is unfriendly - that is, when the target company does not want to be purchased - it is always regarded as an acquisition. Whether a purchase is considered a merger or an acquisition really depends on whether the purchase is friendly or hostile and how it is announced. In other words, the real difference lies in how the purchase is communicated to and received by the target company's board of directors, employees and shareholders. Synergy Synergy is the magic force that allows for enhanced cost efficiencies of the new business.

Synergy takes the form of revenue enhancement and cost savings. By merging, the companies hope to benefit from the following:
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Staff reductions - As every employee knows, mergers tend to mean job losses. Consider all the money saved from reducing the number of staff members from accounting, marketing and other departments. Job cuts will also include the former CEO, who typically leaves with a compensation package. Economies of scale - Yes, size matters. Whether it's purchasing stationery or a new corporate IT system, a bigger company placing the orders can save more on costs. Mergers also translate into improved purchasing power to buy equipment or office supplies - when placing larger orders, companies have a greater ability to negotiate prices with their suppliers. Acquiring new technology - To stay competitive, companies need to stay on top of technological developments and their business applications. By buying a smaller company with unique technologies, a large company can maintain or develop a competitive edge. Improved market reach and industry visibility - Companies buy companies to reach new markets and grow revenues and earnings. A merge may expand two companies' marketing and distribution, giving them new sales opportunities. A merger can also improve a company's standing in the investment community: bigger firms often have an easier time raising capital than smaller ones.

That said, achieving synergy is easier said than done - it is not automatically realized once two companies merge. Sure, there ought to be economies of scale when two businesses are combined, but sometimes a merger does just the opposite. In many cases, one and one add up to less than two. Sadly, synergy opportunities may exist only in the minds of the corporate leaders and the deal makers. Where there is no value to be created, the CEO and investment bankers who have much to gain from a successful M&A deal - will try to create an image of enhanced value. The market, however, eventually sees through this and penalizes the company by assigning it a discounted share price. We'll talk more about why M&A may fail in a later section of this tutorial. Varieties of Mergers From the perspective of business structures, there is a whole host of different mergers. Here are a few types, distinguished by the relationship between the two companies that are merging:
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Horizontal merger - Two companies that are in direct competition and share the same product lines and markets. Vertical merger - A customer and company or a supplier and company. Think of a cone supplier merging with an ice cream maker. Market-extension merger - Two companies that sell the same products in different markets.

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Product-extension merger - Two companies selling different but related products in the same market. Conglomeration - Two companies that have no common business areas. There are two types of mergers that are distinguished by how the merger is financed. Each has certain implications for the companies involved and for investors: o Purchase Mergers - As the name suggests, this kind of merger occurs when one company purchases another. The purchase is made with cash or through the issue of some kind of debt instrument; the sale is taxable. Acquiring companies often prefer this type of merger because it can provide them with a tax benefit. Acquired assets can be written-up to the actual purchase price, and the difference between the book value and the purchase price of the assets can depreciate annually, reducing taxes payable by the acquiring company. We will discuss this further in part four of this tutorial. Consolidation Mergers - With this merger, a brand new company is formed and both companies are bought and combined under the new entity. The tax terms are the same as those of a purchase merger.

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Acquisitions As you can see, an acquisition may be only slightly different from a merger. In fact, it may be different in name only. Like mergers, acquisitions are actions through which companies seek economies of scale, efficiencies and enhanced market visibility. Unlike all mergers, all acquisitions involve one firm purchasing another - there is no exchange of stock or consolidation as a new company. Acquisitions are often congenial, and all parties feel satisfied with the deal. Other times, acquisitions are more hostile. In an acquisition, as in some of the merger deals we discuss above, a company can buy another company with cash, stock or a combination of the two. Another possibility, which is common in smaller deals, is for one company to acquire all the assets of another company. Company X buys all of Company Y's assets for cash, which means that Company Y will have only cash (and debt, if they had debt before). Of course, Company Y becomes merely a shell and will eventually liquidate or enter another area of business. Another type of acquisition is a reverse merger, a deal that enables a private company to get publicly-listed in a relatively short time period. A reverse merger occurs when a private company that has strong prospects and is eager to raise financing buys a publiclylisted shell company, usually one with no business and limited assets. The private company reverse merges into the public company, and together they become an entirely new public corporation with tradable shares.

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Definition of acquisition
Acquisition is the process through which one company takes over the controlling interest of another company. Read more: http://www. for the use of Federal agencies through purchase or lease.Regardless of their category or structure. Related Terms
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Acquisition Acquisition Premium Demerger Forward Triangular Merger Megamerger Merger Securities Reverse Triangular Merger Sweetheart Deal Target Firm Whitewash Resolution More Related Terms
Related Links Read more: http://www.com/terms/m/merger. This decision is usually mutual between both firms.
. The success of a merger or acquisition depends on whether this synergy is achieved.com/university/mergers/mergers1. generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. Acquisition includes obtaining supplies or services by contract or purchase order with appropriated or non-appropriated funds.
Investopedia explains Merger Basically.investopedia.asp#ixzz1Yvb3yVtt What Does Merger Mean? The combining of two or more companies. all mergers and acquisitions have one common goal: they are all meant to create synergy that makes the value of the combined companies greater than the sum of the two parts. when two companies become one.investopedia.

Auditing Auditor's report · Financial audit · GAAS / ISA · Internal audit · Sarbanes–Oxley Act Accounting qualifications CA · CPA · CCA · CGA · CMA · CAT This box: view · talk · edit Mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy. dividing and combining of different companies and similar entities that can aid. selling. finance.
. Look up merger in Wiktionary. The distinction between a "merger" and an "acquisition" has become increasingly blurred in various respects (particularly in terms of the ultimate economic outcome). the free dictionary. or help an enterprise grow rapidly in its sector or location of origin or a new field or new location without creating a subsidiary. corporate finance and management dealing with the buying. other child entity or using a joint venture. although it has not completely disappeared in all situations.

1 Cash o 3.2 Stock o 3. An additional dimension or categorization consists of whether an acquisition is friendly or hostile.1 Short-run factors o 9.
.1 Distinction between mergers and acquisitions 2 Business valuation 3 Financing M&A o 3. and neither of the previous companies survives independently.Contents
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1 Acquisition o 1. Consolidation occurs when two companies combine together to form a new enterprise altogether.1 1990s o 12.3 Which method of financing to choose? 4 Specialist M&A advisory firms 5 Motives behind M&A 6 Effects on management 7 M&A research and statistics for acquired organizations 8 Brand considerations 9 The Great Merger Movement o 9. Acquisitions are divided into "private" and "public" acquisitions.2 2000s 13 M&A in popular culture 14 See also 15 References 16 Further reading
[edit] Acquisition
Main article: Takeover An acquisition is the purchase of one business or company by another company or other business entity.3 Merger waves o 9.4 Deal objectives in more recent merger waves 10 Cross-border M&A 11 M&A failure 12 Major M&A o 12.2 Long-run factors o 9. depending on whether the acquiree or merging company (also termed a target) is or is not listed on public stock markets.

a smaller firm will acquire management control of a larger and/or longerestablished company and retain the name of the latter for the post-acquisition combined entity. Sometimes. and therefore control. however. which have different tax and regulatory implications: This section does not cite any references or sources. The buyer buys the assets of the target company. as the acquiror secures endorsement of the transaction from the board of the acquiree company. and often do. this form of transaction carries with it all of the liabilities accrued by that business over its past and all of the risks that company faces in its commercial environment. This usually requires an improvement in the terms of the offer and/or through negotiation. while various studies have shown that 50% of acquisitions were unsuccessful.[4] There are also a variety of structures used in securing control over the assets of a company. employee benefits
. the board and/or management of the target is unwilling to be bought or the target's board has no prior knowledge of the offer. Hostile acquisitions can. Please help improve this section by adding citations to reliable sources. A reverse merger occurs when a privately held company (often one that has strong prospects and is eager to raise financing) buys a publicly listed shell company. with many dimensions influencing its outcome. unquantified damage awards such as those that could arise from litigation over defective products. if the buyer buys out the entire assets.[1] The acquisition process is very complex. Ownership control of the company in turn conveys effective control over the assets of the company. Another type of acquisition is the reverse merger.[2] Whether a purchase is perceived as being a "friendly" one or a "hostile" depends significantly on how the proposed acquisition is communicated to and perceived by the target company's board of directors. This is known as a reverse takeover. It is normal for M&A deal communications to take place in a so-called 'confidentiality bubble' wherein the flow of information is restricted pursuant to confidentiality agreements. ultimately become "friendly". the companies cooperate in negotiations. but since the company is acquired intact as a going concern. "Acquisition" usually refers to a purchase of a smaller firm by a larger one. A buyer often structures the transaction as an asset purchase to "cherry-pick" the assets that it wants and leave out the assets and liabilities that it does not. Unsourced material may be challenged and removed.[3] In the case of a friendly transaction. of the target company being purchased. usually one with no business and limited assets. in the case of a hostile deal. (June 2008)
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The buyer buys the shares. This type of transaction leaves the target company as an empty shell. This can be particularly important where foreseeable liabilities may include future.Achieving acquisition success has proven to be very difficult. a form of transaction that enables a private company to be publicly listed in a relatively short time frame. The cash the target receives from the sell-off is paid back to its shareholders by dividend or through liquidation. employees and shareholders.

Retention is only possible when resources are exchanged and managed without affecting their independence. or environmental damage. The risk of losing implicit knowledge is always associated with the fast pace acquisition. Extracting technological benefits during and after acquisition is ever challenging issue because of organizational differences. firms can generate greater values through the retention of knowledge-based resources which they generate and integrate. 4. As per knowledge-based views. Detailed knowledge exchange and integrations are difficult when the acquired firm is large and high performing. whereas stock transactions can frequently be structured as like-kind exchanges or other arrangements that are tax-free or taxneutral. For acquired firm symbolic and cultural independence which is the base of technology and capabilities are more important than administrative independence. statutory merger or statutory consolidation. which can be achieved independently of the corporate mechanics through various means
. Transfer of technologies and capabilities are most difficult task to manage because of complications of acquisition implementation. 3. "spin-off" and "spin-out" are sometimes used to indicate a situation where one company splits into two. impose on transfers of the individual assets. A disadvantage of this structure is the tax that many jurisdictions. Improper documentation and changing implicit knowledge makes it difficult to share information during acquisition.This paragraph does not make a clear distinction between the legal concept of a merger (with the resulting corporate mechanics. The terms "demerger". both to the buyer and to the seller's shareholders. Strategic management of all these resources is a very important factor for a successful acquisition.or terminations. 2. employees and literature are always delicate during and after acquisition. Preservation of tacit knowledge. which have nothing to do with the resulting power grab as between the management of the target and the acquirer) and the business point of view of a "merger". the terms merger and acquisition mean slightly different things. 5. It is imperative for the acquirer to understand this relationship and apply it to its advantage. Based on the content analysis of seven interviews authors concluded five following components for their grounded model of acquisition: 1. Increase in acquisitions in our global business environment has pushed us to evaluate the key stake holders of acquisition very carefully before implementation. particularly outside the United States. generating a second company separately listed on a stock exchange. Management of executives from acquired firm is critical in terms of promotions and pay incentives to utilize their talent and value their expertise.
[edit] Distinction between mergers and acquisitions
Although often used synonymously.

future maintainable earnings valuation. From a legal point of view. therefore. discounted cash flow (DCF) valuation
Professionals who valuate businesses generally do not use just one of these methods but a combination of some of them. a Review Engagement or an Audit. The firms are often of about the same size. Both companies' stocks are surrendered and new company stock is issued in its place. An example of this would be the takeover of Chrysler by Daimler-Benz in 1999 which was widely referred to as a merger at the time. the buyer "swallows" the business and the buyer's stock continues to be traded. But when the deal is unfriendly (that is. simply allow the acquired firm to proclaim that the action is a merger of equals. as part of the deal's terms. A purchase deal will also be called a merger when both CEOs agree that joining together is in the best interest of both of their companies. In the pure sense of the term. when the target company does not want to be purchased) it is always regarded as an acquisition. a merger happens when two firms agree to go forward as a single new company rather than remain separately owned and operated. both firms ceased to exist when they merged. Accurate business valuation is one of the most important aspects of M&A as valuations like these will have a major impact on the price that a business will be sold for. Most often this information is expressed in a Letter of Opinion of Value (LOV) when the business is being valuated for interest's sake. When one company takes over another and clearly establishes itself as the new owner. relative valuation (comparable company & comparable transactions). Being bought out often carries negative connotations. etc. and a new company.
[edit] Business valuation
The five most common ways to valuate a business are
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asset valuation. acquisition. in order to obtain a more accurate value. was created. as well as possibly others that are not mentioned above. in the 1999 merger of Glaxo Wellcome and SmithKline Beecham. by describing the deal euphemistically as a merger. In practice. the purchase is called an acquisition. This kind of action is more precisely referred to as a "merger of equals". deal makers and top managers try to make the takeover more palatable.For example. Usually. [GlaxoSmithKline]. statutory merger. however. the target company ceases to exist. actual mergers of equals don't happen very often. one company will buy another and. historical earnings valuation. more detailed ways of expressing the value of a business.such as "triangular merger". While these reports generally get more detailed and
. even if it is technically an acquisition. The information in the balance sheet or income statement is obtained by one of three accounting measures: a Notice to Reader. There are other.

expensive as the size of a company increases. If the issuance of shares is necessary. with a share deal the buyer’s capital structure might be affected and the control of the New co modified. With pure cash deals. It consumes financial slack. liquidity ratios might decrease. regardless of size. However. issued to the shareholders of the acquired company at a given ratio proportional to the valuation of the latter. The contingency of the share payment is indeed removed. ROA). The risk is removed with a cash transaction. Thus. The form of payment might be decisive for the seller. If the buyer pays cash.
[edit] Stock
Payment in the acquiring company's stock. there are three main financing options:
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Cash on hand: it consumes financial slack (excess cash or unused debt capacity) and may decrease debt rating.
[edit] Financing M&A
Mergers are generally differentiated from acquisitions partly by the way in which they are financed and partly by the relative size of the companies. the balance sheet of the buyer will be modified and the decision maker should take into account the effects on the reported financial results. may decrease debt rating and increase cost of debt. When submitting an offer.
[edit] Which method of financing to choose?
There are some elements to think about when choosing the form of payment. Transaction costs include underwriting or closing costs of 1% to 3% of the face value. there is no doubt on the real value of the bid (without considering an eventual earnout). in a pure cash deal (financed from the company’s current account). For example.
.g. a cash offer preempts competitors better than securities. this is not always the case as there are many complicated industries which require more attention to detail. Various methods of financing an M&A deal exist:
[edit] Cash
Payment by cash. Taxes are a second element to consider and should be evaluated with the counsel of competent tax and accounting advisers. the company might show lower profitability ratios (e. shareholders of the acquiring company might prevent such capital increase at the general meeting of shareholders. Third. the acquiring firm should consider other potential bidders and think strategically. Then. The form of payment and financing options are tightly linked. On the other hand. Such transactions are usually termed acquisitions rather than mergers because the shareholders of the target company are removed from the picture and the target comes under the (indirect) control of the bidder's shareholders. economic dilution must prevail towards accounting dilution when making the choice. in a pure stock for stock transaction (financed from the issuance of new shares). There are no major transaction costs.

Increased revenue or market share: This assumes that the buyer will be absorbing a major competitor and thus increase its market power (by capturing increased market share) to set prices. lowering the costs of the company relative to the same revenue stream.[5]
[edit] Specialist M&A advisory firms
Although at present the majority of M&A advice is provided by full-service investment banks. Transaction costs must also be considered but tend to have a greater impact on the payment decision for larger transactions. and subject to SEC (FINRA) regulation. These companies are sometimes referred to as Transition companies.
[edit] Motives behind M&A
The dominant rationale used to explain M&A activity is that acquiring firms seek improved financial performance. an advisor must be a licensed broker dealer. Economy of scope: This refers to the efficiencies primarily associated with demand-side changes.: buyers tend to offer stock when they believe their shares are overvalued and cash when undervalued.•
Issue of stock: it increases financial slack. the financing possibilities are:
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Issue of stock (same effects and transaction costs as described above). assisting businesses often referred to as "companies in transition. Transaction costs include fees for preparation of a proxy statement.g. an extraordinary shareholder meeting and registration. a bank buying a stock broker could then sell its banking products to the stock broker's customers. The following motives are considered to improve financial performance:
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Economy of scale: This refers to the fact that the combined company can often reduce its fixed costs by removing duplicate departments or operations. may improve debt rating and reduce cost of debt. paying cash or with shares is a way to signal value to the other party. More information on M&A advisory firms is provided at corporate advisory.
If the buyer pays with stock. while the broker can sign up the
. who only provide M&A advice (and not financing). stock will create financial flexibility. e. Finally. Shares in treasury: it increases financial slack (if they don’t have to be repurchased on the market). may improve debt rating and reduce cost of debt. recent years have seen a rise in the prominence of specialist M&A advisers. thus increasing profit margins." To perform these services in the US. Cross-selling: For example. of different types of products. such as increasing or decreasing the scope of marketing and distribution. Transaction costs include brokerage fees if shares are repurchased in the market otherwise there are no major costs.
In general.

A merger that creates a vertically integrated firm can be profitable.[6] Vertical integration: Vertical integration occurs when an upstream and downstream firm merge (or one acquires the other). Synergy: For example. 2009) namely united money market fund and united growth and income fund. this does not always deliver value to shareholders (see below).[citation needed] Absorption of similar businesses under single management: similar portfolio invested by two different mutual funds (Ahsan Raza Khan. This increases profits and consumer surplus. Another example are purchasing economies due to increased order size and associated bulk-buying discounts. Or. Geographical or other diversification: This is designed to smooth the earnings results of a company. limiting the tax motive of an acquiring company. creating two deadweight losses. There are several reasons for this to occur. Double marginalization occurs when both the upstream and downstream firms have monopoly power. each firm reduces output from the competitive level to the monopoly level.</ref>
However. thereby acquiring its talent (if that is its main asset and appeal). the acquiring company simply hires the staff of the target private company. Acqui-hires have become a very popular type of transaction in recent years. rules are in place to limit the ability of profitable companies to "shop" for loss making companies. In the United States and many other countries. One reason is to internalise an externality problem. additional motives for merger and acquisition that may not add shareholder value include:
. on average and across the most commonly studied variables. Tax minimization strategies include purchasing assets of a non-performing company and reducing current tax liability under the Tanner-White PLLC Troubled Asset Recovery Plan. Taxation: A profitable company can buy a loss maker to use the target's loss as their advantage by reducing their tax liability. By merging the vertically integrated firm can collect one deadweight loss by setting the downstream firm's output to the competitive level. 1991) and the interaction of target and acquiring firm resources can create value through either overcoming information asymmetry or by combining scarce resources. giving conservative investors more confidence in investing in the company. The target private company simply dissolves and little legal issues are involved. A common example is of such an externality is double marginalization. acquiring firms' financial performance does not positively change as a function of their acquisition activity. In this case. However.[7] "Acqui-hire": An "acq-hire" (or acquisition-by-hire) may occur especially when the target is a small private company or is in the startup phase. Resource transfer: resources are unevenly distributed across firms (Barney. which over the long term smoothens the stock price of a company. a manufacturer can acquire and sell complementary products.•
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bank's customers for brokerage accounts. managerial economies such as the increased opportunity of managerial specialization. caused the management to absorb united money market fund into united growth and income fund.[8] Therefore.

given the ability for the right brand choices to drive preference and earn a price premium. Brand decision-makers essentially can choose from four different approaches to dealing with naming issues. It’s much easier to succeed with a team of quality players that you select deliberately rather than try to win a game with those who randomly show up to play. beginning with what to call the company after the transaction and going down into detail about what to do about overlapping and competing product brands. Peter Lynch memorably termed this "diworseification". the shareholders). instead of the profit per share. there can only be one CEO. Empire-building: Managers have larger companies to manage and hence more power. And. et cetera at a time.[9] If the businesses of the acquired and acquiring companies overlap. CFO. Manager's compensation: In the past. (In his book One Up on Wall Street. any investment of time and energy in re-recruitment will likely pay for itself many times over if it helps a business retain just a handful of key players that would have otherwise left. Decisions about what brand equity to write off are not inconsequential. in other words. then such turnover is to be expected.[10] Organizations should move rapidly to re-recruit key managers. since it is possible for individual shareholders to achieve the same hedge by diversifying their portfolios at a much lower cost than those associated with a merger. each with specific pros and cons:[12]
. the future success of a merger or acquisition depends on making wise brand choices. which would give the team a perverse incentive to buy companies to increase the total profit while decreasing the profit per share (which hurts the owners of the company.
[edit] M&A research and statistics for acquired organizations
Given that the cost of replacing an executive can run over 100% of his or her annual salary.•
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Diversification: While this may hedge a company against a downturn in an individual industry it fails to deliver value.) Manager's hubris: manager's overconfidence about expected synergies from M&A which results in overpayment for the target company.[11]
[edit] Brand considerations
Mergers and acquisitions often create brand problems. The study found that target companies lose 21 percent of their executives each year for at least 10 years following an acquisition – more than double the turnover experienced in non-merged firms.
[edit] Effects on management
A study published in the July/August 2008 issue of the Journal of Business Strategy suggests that mergers and acquisitions destroy leadership continuity in target companies’ top management teams for at least a decade following a deal. certain executive management teams had their payout based on the total amount of profit of the company.

[13] 3. keeping the Bucyrus International name. which has since changed its brand name to "PwC". and brand recognition by their customers.800 of these firms disappeared into consolidations. many of which acquired substantial shares of the markets in which they operated. the company lost the considerable value of both Yellow Freight and Roadway Corp. The detailed decisions about the brand portfolio are covered under the topic brand architecture.
[edit] The Great Merger Movement
The Great Merger Movement was a predominantly U. The strongest legacy brand with the best prospects for the future lives on. Not every merger with a new name is successful. The classic example is the merger of Bell Atlantic with GTE. as in the case of PricewaterhouseCoopers. An example is Caterpillar Inc. During this time. Companies such as DuPont. many of these mergers were capital-intensive.[13] Beyond the bigger issue of what to call the company after the transaction comes the ongoing detailed choices about what divisional.S. patents. 2. In 1990 the value was only 3% and from 1998–2000 it was around 10–11% of GDP. due to growing technological advances of their products. In addition. and General Electric that merged during the Great Merger Movement were able to keep their dominance in their respective sectors through 1929. There were also other companies that held the greatest market share in 1905 but at the same time did not have the competitive advantages of the companies like DuPont and General Electric. 4. In 1900 the value of firms acquired in mergers was 20% of GDP. It is estimated that more than 1. By consolidating into YRC Worldwide. Some companies try to please everyone and keep the value of both brands by using them together. powerful institutions that dominated their markets. Due to high fixed costs. The companies that merged were mass producers of homogeneous goods that could exploit the efficiencies of large volume production. Keep both names and use them together. small firms with little market share consolidated with similar firms to form large. the United brand will continue forward. Keep one name and demote the other. This can create a unwieldy name. In the merger of United Airlines and Continental Airlines. Discard both legacy names and adopt a totally new one. The vehicle used were so-called trusts.1. when
. and in some cases today. Keep one name and discontinue the other. while Continental is retired. Ego can drive choice just as well as rational factors such as brand value and costs involved with changing brands. The strongest name becomes the company name and the weaker one is demoted to a divisional brand or product brand. which became Verizon Communications. The factors influencing brand decisions in a merger or acquisition transaction can range from political to tactical. business phenomenon that happened from 1895 to 1905. US Steel. product and service brands to keep. These companies such as International Paper and American Chicle saw their market share decrease significantly by 1929 as smaller competitors joined forces with each other and provided much more competition.

However. As other firms joined this practice. When the Panic of 1893 hit. These cartels were thus able to raise prices right away. Higher quantity produced). they were in fact done because that was the trend at the time. However. However. when demand falls. the firm’s marginal revenue fell as well. these prices set by cartels only provided a short-term solution because cartel members would cheat on each other by setting a lower price than the price set by the cartel.[citation
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[edit] Short-run factors
One of the major short run factors that sparked The Great Merger Movement was the desire to keep prices high. these producers have more of an incentive to maintain output and cut prices. For producers of homogeneous goods.e. As quasi-monopolists. These "quick mergers" involved mergers of companies with unrelated technology and different management. the mergers were not done to see large efficiency gains. these newly-merged companies had an incentive to maintain output and reduce prices. With many firms in a market. causing prices to fall once again. also known as cartels. in order to spread out the high fixed costs these producers faced (i. resulting in a loss. the fall in demand led to a steep fall in prices. Given high fixed costs.e. Also. these
.demand fell. in order for a firm to earn profit.[14] One strategy to keep prices high and to maintain profitability was for producers of the same good to collude with each other and form associations. A major catalyst behind the Great Merger Movement was the Panic of 1893. lowering cost per unit) and the desire to exploit efficiencies of maximum volume production. firms set quantity where marginal cost equals marginal revenue and price where this quantity intersects demand. As a result. prices began falling everywhere and a price war ensued. Companies which had specific fine products. The new and bigger company would actually face higher costs than competitors because of these technological and managerial differences. Thus. these costs can be spread out through greater production (i. high prices attracted the entry of new firms into the industry who sought to take a piece of the total product. also being in a high fixed costs industry. Lamoreaux for explaining the steep price falls is to view the involved firms acting as monopolies in their respective markets. sometimes more than doubling prices. earned their profits on high margin rather than volume and took no part in Great Merger Movement. Another economic model proposed by Naomi R. which led to a major decline in demand for many homogeneous goods. the high price set by the cartel would encourage new firms to enter the industry and offer competitive pricing. the efficiency gains associated with mergers were not present. firms would steal part of another firm’s market share by dropping their price slightly and producing to the point where higher quantity and lower price exceeded their average total cost. To return to the quasi-monopoly model. However. demand fell and along with demand. supply of the product remains high. As a result. the new price was below average total cost. during the Panic of 1893. However more often than not mergers were "quick mergers". like fine writing paper.

LBO
[edit] Deal objectives in more recent merger waves
During the third merger wave (1965–1989).cartels did not succeed in maintaining high prices for a period of no more than a few years.
. it was advantageous for firms to merge and reduce their transportation costs thus producing and transporting from one location rather than various sites of different companies as in the past. the courts attacked large companies for strategizing with others or within their own companies to maximize profits. Private Equity. due to desire to keep costs low.
[edit] Merger waves
The economic history has been divided into Merger Waves based on the merger activities in the business world as:[15] Period Name Facet 1897–1904 First Wave Horizontal mergers 1916–1929 Second Wave Vertical mergers 1965–1969 Third Wave Diversified conglomerate mergers 1981–1989 Fourth Wave Congeneric mergers. The U.to fourfold during the second half of the nineteenth century. corporate marriages involved more diverse companies. Sometimes this was done to smooth out cyclical bumps. United States. the hope being that it would hedge an investment portfolio. many of these initially successful mergers were eventually dismantled. In addition. Acquirers more frequently bought into different industries. government passed the Sherman Act in 1890. with other top firms in the market in order to control a large market share and thus successfully set a higher price. Thus improved technology and transportation were forerunners to the Great Merger Movement.S. however. Starting in the 1890s with such cases as Addyston Pipe and Steel Company v. Price fixing with competitors created a greater incentive for companies to unite and merge under one name so that they were not competitors anymore and technically not price fixing. In part due to competitors as mentioned above. coupled with economies of scale also increased firm size by two. through horizontal integration. Low transport costs.[citation needed]
[edit] Long-run factors
In the long run. Corporate Raiding 1992–2000 Fifth Wave Cross-border mergers 2003–2008 Sixth Wave Shareholder Activism. Hostile takeovers. to diversify. and in part due to the government. setting rules against price fixing and monopolies. The most viable solution to this problem was for firms to merge. technological changes prior to the merger movement within companies increased the efficient size of plants with capital intensive assembly lines allowing for economies of scale.

and fluid.
[edit] M&A failure
Despite the goal of performance improvement. On this basis. The rise of globalization has exponentially increased the necessity for MAIC Trust accounts and securities clearing services for Like-Kind Exchanges for cross-border M&A.[17] Even mergers of companies with headquarters in the same country are very much of this type and require MAIC custodial services (cross-border Mergers). fragile. The hot prizes aren’t things—they’re thoughts. Studies are mostly focused on individual determinants. methods. so to speak. In 1997 alone. This is just as true for other supposedly "single country" mergers. when Boeing acquires McDonnell Douglas. A book by Thomas Straub (2007) "Reasons for frequent failure in Mergers and Acquisitions"[18] develops a comprehensive research framework that bridges rival perspectives and promotes a modern understanding of factors underlying M&A performance. Integrating it usually takes more finesse and expertise than integrating machinery. Soft goods.[16]
[edit] Cross-border M&A
In a study conducted in 2000 by Lehman Brothers. The first important step towards this objective is the development of a common frame of reference that spans conflicting theoretical assumptions from different perspectives. licenses. large M&A deals cause the domestic currency of the target corporation to appreciate by 1% relative to the acquirers. real estate. market share. methodologies. Soft capital. such as the $29 billion dollar merger of Swiss drug makers Sandoz and Ciba-Geigy (now Novartis). After all.Starting in the fourth merger wave (1992–1998) and continuing today. Buyers aren’t necessarily hungry for the target companies’ hard assets. like this. customer base. inventory and other tangibles. Numerous empirical studies show high failure rates of M&A deals. it was found that. there were over 2333 cross-border transactions. the two American companies must integrate operations in dozens of countries around the world. Many companies are being bought for their patents. Now they’re going after entirely different prizes. people and relationships. companies are more likely to acquire in the same business. worth a total of approximately $298 billion. Due to the complicated nature of cross-border M&A. name brand. or close to it. research staffs. results from mergers and acquisitions (M&A) are often disappointing. or culture. is very perishable. firms that complement and strengthen an acquirer’s capacity to serve customers. a comprehensive framework is proposed with which to understand the origins of M&A performance better and address the problem of fragmentation by integrating the most
. the vast majority of cross-border actions have unsuccessful anies seek to expand their global footprint and become more agile at creating high-performing businesses and cultures across national boundaries. on average.

Companies. Marshall Eriksen and Barney Stinson work at a large bank. Inc
74.000 59. called Crown Acquisitions. works in mergers and acquisitions.761 52. Pharmacia Corporation [31] JP Morgan Chase & Co Bank One Corp Anheuser-Busch Inbev Inc. Shell Transport & Royal Dutch Petroleum Co.041 68. In the film The Thomas Crown Affair. BellSouth Corporation AT&T Broadband & Comcast Corporation Internet Svcs Pfizer Inc.000
[edit] M&A in popular culture
In the novel American Psycho the protagonist Patrick Bateman. Thomas Crown is the CEO of a fictional mergers and acquisitions firm. In the sitcom How I Met Your Mother. Goliath National Bank (GNB).974 59. Wyeth Spin-off: Nortel Networks Corporation Pfizer Inc.3 4 5 6 7 8 9
2004 2006 2001 2009 2000 2002 2004
10 2008
Plc. involved in M&A transactions
What is the difference between a merger and a takeover?
. which he once referred to as "murders and executions" to a potential victim.671 72. played by Christian Bale in the film adaptation. Trading Co [29][30] AT&T Inc.515 58.559 72.

in an acquisition.they combine two previously separate firms into a single legal entity. which combine to become one legal entity with the goal of producing a company that is worth more than the sum of its parts. Significant operational advantages can be obtained when two firms are combined and. The motivation to pursue a merger or acquisition can be considerable. in fact. This combination of "unequals" can produce the same benefits as a merger. the acquiring firm usually offers a
. involves two relatively equal companies. This has all the makings of a merger of equals as the chairmen in both organizations became joint-leaders in the new organization.In a general sense. greater sales revenue and market share in its market. However. merged with German Automaker. For example. mergers and takeovers (or acquisitions) are very similar corporate actions . Unlike in a merger. the shareholders usually have their shares in the old company exchanged for an equal number of shares in the merged entity. is characterized by the purchase of a smaller company by a much larger one. on the other hand. broadened diversification and increased tax efficiency. or acquisition. through structural and operational advantages secured by the merger. A merger involves the mutual decision of two companies to combine and become one entity. in other words. A larger company can initiate a hostile takeover of a smaller firm. which essentially amounts to buying the company in the face of resistance from the smaller company's management. boosting shareholder values for both groups of shareholders. a company that combines itself with another can experience boosted economies of scale. Daimler Benz to form DaimlerChrysler. Chrysler Corp. In a merger of two corporations. American Automaker. it can be seen as a decision made by two "equals". The merger was thought to be quite beneficial to both companies as it gave Chrysler an opportunity to reach more European markets and Daimler Benz would gain a greater presense in North America. The combined business. but it does not necessarily have to be a mutual decision. can cut costs and increase profits. the underlying business rationale and financing methodology for mergers and takeovers are substantially different. A typical merger. A takeover. the goal of most mergers and acquisitions is to improve company performance and shareholder value over the long-term. back in 1998.

Reddy's Labs acquired Betapharm Beehcam ceased to exist and merged to become a through an agreement amounting $597 new company. The companies incorporated in India.
nture companies are the most preferred form of corporate entities for Doing Business in India. known as Glaxo SmithKline. there are certain differences between mergers and acquisitions.cash price per share to the target firm's shareholders or the acquiring firm's share's to the shareholders of the target firm according to a specified conversion ratio. The stocks of both the companies are surrendered. as Pixar's shareholders all approved the decision to be acquired. The buyer company “swallows” the business of the target company. Acquisition The case when one company takes over another and establishes itself as the new owner of the business. however. buying it outright for its shareholders. Click here for Types of companies and corporations in India. even with up to 100% foreign equity. Target companies can employ a number of tactics to defend themselves against an unwanted hostile takeovers. Glaxo Wellcome and SmithKline Dr. are treated the same as domestic companies. A Joint Venture may be any of the business entities available in India. million. There are no separate laws for joint ventures in India. such as including covenants in their bond issues that force early debt repayment at premium prices if the firm is taken over.
Though the two words mergers and acquisitions are often spoken in the same breath and are also used in such a way as if they are synonymous. An example of an acquisition would be how the Walt Disney Corporation bought Pixar Animation Studios in 2006.
For example.
. Either way. while new stocks are issued afresh. Merger The case when two companies (often of same size) decide to move forward as a single new company instead of operating business separately. this takeover was friendly. the purchasing company essentially finances the purchase of the target company. which ceases to exist. In this case.

The Government has outlined 37 high priority areas covering most of the industrial sectors.. For these greater equity investments or for areas of
. one of them non-resident or both residents.
Contact us for setting up Joint Venture in India
. who/which may be individual/company. and start a new business.. Investment proposals involving up to 74% foreign equity in these areas receive automatic approval within two weeks. but government approval is required. automatic approval is available for 74% foreign equity holdings setting up international trading companies engaged primarily in export activities. a branch of a foreign company attracts a higher rate of tax than a subsidiary or a joint venture company. In other special cases. The other party subscribes for the shares in cash. a special approval of FIPB is required. Some practical aspects of formation of joint venture companies in India and the prerequisites which the parties should take into account are enumerated herein after. if a foreign partner or an NRI or PIO partner is involved. incorporate a company in India. Business of one party is transferred to the company and as consideration for such transfer. The above two parties subscribe to the shares of the joint venture company in agreed proportion. a joint venture is covered under automatic route. not covered under the automatic route. shares are issued by the company and subscribed by that party. collaborate to jointly carry on the business of that company and its shares are taken by the said third party through payment in cash. (individuals or companies).Sector wise Guide for sectorwise guidelines under automatic route. in cash. Two parties. However.Government Approvals for Joint Ventures .A typical Joint Venture is where: 1. An application to the Reserve Bank of India is required. 3. The approval can be obtained from either from RBI or FIPB. Greater than 74% of equity and areas outside the high priority list are open to investment. In case. Foreign companies are also free to open branch offices in India. Please see Foreign Investment in India . Approval of foreign equity is not limited to 74% and to high priority industries. Besides the 37 high priority areas. All the joint ventures in India require governmental approvals. The liability of the parent company is also greater in case of a branch office. Promoter shareholder of an existing Indian company and a third party. then the approval of Reserve bank of India is required. 2.

For major investment proposals or for those that do not fit within the existing policy parameters. The FIPB is located in the office of the Prime Minister and can provide single-window clearance to proposals in their totality without being restricted by any predetermined parameters. and telecommunications. coal washeries. Export Oriented Unit (EOU) or a unit in one of the Export Processing Zones ("EPZ's"). Once a partner is selected generally a Memorandum of Understanding or a Letter of Intent is signed by the parties highlighting the basis of the future joint venture agreement. refining and marketing of petroleum products has now been opened to foreign participation. the terms should be thoroughly discussed and negotiated to avoid any misunderstanding at a later stage. A response is given within 6 weeks. this requirement may be eliminated. producing. there is the high-powered Foreign Investment Promotion Board ("FIPB").
How to Enter into a Joint Venture Agreement?
Selection of a good local partner is the key to the success of any joint venture. luxury railways. The entire hydrocarbon sector. A Memorandum of Understanding and a Joint Venture Agreement must be signed after consulting lawyers well versed in international laws and multi-jurisdictional laws and procedures. Before signing a Joint Venture Agreement the following must be properly addressed:
•
Drafting International Joint Venture Agreements Joint Venture Registry : Searching Joint Venture Partners Joint Venture Consultants Joint Venture Successfully Joint Ventures in India
Dispute resolution agreements
. Full foreign ownership (100% equity) is readily allowed in power generation.
Drafting Joint Venture Agreements
Before signing the joint venture agreement. electronics. Negotiations require an understanding of the cultural and legal background of the parties. Foreign investment is also welcomed in many of infrastructure areas such as power. steel. In view of the country's improved balance of payments position.investment outside of high priority an application in the form FC (SIA) has to be filed with the Secretariat for Industrial Approvals. coal washeries. The government is also examining a proposal to do away with the stipulation that foreign equity should cover the foreign exchange needs for import of capital goods. The Government had recently allowed foreign investment up to 51% in mining for commercial purposes and up to 49% in telecommunication sector. including exploration.

Some popular joint venture in India
. Proper drafting of Joint Venture Agreements are very important for the success of any joint venture. Break of deadlock Termination.
The Joint Venture agreement should be subject to obtaining all necessary governmental approvals and licenses within specified period. We can help you in setting up your Joint Venture: from entry strategies. has helped US companies & Foreign companies in setting up their Joint Venture operations in India and other countries.• • • • • • • • • • • • • • • • • • •
Applicable law. Negotiating Joint Ventures properly is very important for a win-win Joint Venture.
Drafting International Joint Venture Agreements
Madaan & Co. Force Majeure Holding shares Transfer of shares Board of Directors General meeting. CEO/MD Management Committee Important decisions with consent of partners Dividend policy Funding Access. Business Joint Ventures are more likely to be beneficial if Joint Venture Entry Strategies are carefully formulated. to negotiations to drafting agreements to compliance programs. Change of control Non-Compete Confidentiality Indemnity Assignment.

nic. not falling within the category of a Public Sector Undertaking. (PRCL) Pipavav Railway Corporation Ltd. under difficult urban environment and within a very limited time frame.co. to be the torch bearer of technology revolution in the seventies with the motto of R&D and self-reliance. 1989. NCTI a non profit joint venture of India Trade Promotion Organisation (ITPO) and National Informatics Centre (NIC) is a Ministry of Commerce & Industry. on Western Railway .DMRC. The authorised share capital of the company is Rs. PRCL is the first infrastructure modal of Public Private Partnership in rail transportation. web site url: http://www. antenna test range. ECIL has set up extensive infrastructure for design.00 lakhs and the paid up capital is Rs. (PRCL) is a Joint Venture of Indian Railways and the Gujarat Pipavav Port Ltd (GPPL).350. 1956. is vested with greater autonomy and powers to execute this gigantic project involving many technical complexities. of India. quality control and calibration laboratories and all that is required to enable the company to perform. a company under the name Delhi Metro Rail Corporation was registered on 03-05-95 under the Companies Act. web site url: http://www. web site url: http://www.
. Over the years. under Railway Act.com/ Rehabilitation Plantations Ltd. set up to construct.pipavavrailway. Punalur (RPL) RPL started as a government rubber plantation scheme in 1972 for the settlement of Sri Lankan repatriates which was necessitated by Sirimao-Shastri Agreement of 1964. PRCL enjoys the status of a Railway Administration.339. The share capital contribution of Government of India is 40% and remaining 60% was contributed by Government of Kerala. antenna spinning facility. The Trade Point Programme of the UNCTAD has certified NCTI as an Operational Trade Point in New Delhi.delhimetrorail.ecil.ncti-india. development. Later on it was formed into Government Company and incorporrated on 05/05/1976.com Pipavav Railway Corporation Ltd.in National Centre for Trade Information (NCTI) With a view to creating an institutional mechanism for collection and dissemination of trade data and improving information services to the business community especially small and medium enterprises. web site url: http://alttc.. at a total cost of about US $7 million. as a joint venture of the Govt. maintain and operate 270 kilometer long broad gauge railway line connecting port of Pipavav.com Electronics Corporation of India Limited(ECIL) ECIL. manufacturing and quality assurance which includes . web site url: http://www. of India recognised Trade Point-India under the Trade Efficiency Programme of United Nations Conference on Trade & Development (UNCTAD). DMRC has equal equity participation from GOI and GNCTD .27 lakhs. in the state of Gujarat to Surendranagar Jn. United Nations Development Programme & International Telecommunication Union to serve the Telecom training needs of South East Asia and the ESCAP region. Govt.in Delhi Metro Rail Corporation For implementation and subsequent operation of Delhi MRTS. the National Centre for Trade Information (NCTI) was set up in 1995 under the Ministry of Commerce & Industry pursuant to a Cabinet decision. was formed in the year 1967. computer networks for material management and MIS.Basic listings Advanced Level Telecommunication Training Centre (ALTTC) The Advanced Level Telecommunication Training Centre (ALTTC) was established in 1975. the key factors for growth. It serves as the apex training centre of the Department of Telecommunications of the Government of India. computer aided design and manufacturing.

'entreprise conjointe'. such partnership can also be called a joint venture where the parties are "co-venturers".
web site url: http://mha. In a joint venture. the term 'joint venture' is variously translated as 'association d'entreprises'.sjvnindia.Satluj Jal Vidyut Nigam Ltd. franchise and brand use agreements. The JV is dissolved when that goal is reached. A joint venture can ensure the success of smaller projects for those that are just starting in the business world or for established corporations. both parties are equally invested in the project in terms of money.7. Sony Ericsson and Penske Truck Leasing. Some major joint ventures include Dow Corning. A joint venture takes place when two parties come together to take on one project. In Germany. 1988 as a joint venture of Govt. (Formerly NJPC) was incorporated on May 24. While joint ventures are generally small projects. rental agreements. better defined under the rules of company law. 'coentreprise' and 'entreprise commune'. for ‘‘onetime’’ contracts. and effort to build on the original concept. But generally. for a finite time. joint ventures limited by guarantee with partners holding shares. major corporations also use this method in order to diversify. management contracts. of HP. a joint
.1988 as a Joint Venture of Government of India & Government of U.(THDC) Tehri Hydro Development Corporation Ltd. The venture can be for one specific project only . In European law. There are other types of companies such as JV limited by guarantee. when two or more persons come together to form a temporary partnership for the purpose of carrying out a particular project.when the JV is referred to more correctly as a consortium (as the building of the Channel Tunnel) . a new entity and new assets by contributing equity.or a continuing business relationship. of India and Govt. time. expenses and assets.P. MillerCoors. web site url: http://www. the term societe anonyme loosely covers all foreign collaborations.(THDC) was incorporated on 12.com Tehri Hydro Development Corporation Ltd. The Satluj Jal Vidyut Nigam Ltd.htm
A joint venture is a business agreement in which parties agree to develop. The consortium JV (also known as a cooperative agreement) is formed where one party seeks technological expertise or technical service arrangements.in/RPL.nic. In France. Since the cost of starting new projects is generally high.'joint venture' is better represented as a 'combination of companies' (Konzern)[1] On the other hand. They exercise control over the enterprise and consequently share revenues. The 1500 MW Nathpa Jhakri Hydroelectric Power Project (NJHPP) is the first project undertaken by the company. the term 'joint-venture' (or joint undertaking) is an elusive legal concept.

as well as the resulting profits. and communication within the joint venture are necessary. both parties must be committed to focusing on the future of the partnership.” there has to be 100% commitment from both sides. it is important to ensure both parties are a match with the projected client base. it is necessary to have a strategic plan in place. A joint venture is not to be taken lightly.venture allows both parties to share the burden of the project. it is necessary for both parties to be capable of communicating what they are able to offer to the project and what their expectations are. A person involved in a joint venture can no longer make all of the decisions for the business alone. Sometimes. For a businessperson to embark on a joint venture. Since money is involved in a joint venture. he or she needs to be committed and willing to work cooperatively with the other party involved. integrity. rather than just the immediate returns.
. In short. [2] When determining whether or not to embark on a joint venture. For it to be truly a “joint venture. In a joint venture. short term and long term successes are both important. Therefore. a misunderstanding or a lack of communication can destroy a joint venture. Ultimately. honesty. each party must compliment the other in business. In order to achieve this success.

directories. There are also other venues to find a JV partner such as seminars. there are watchful funds and investors who could go in for a JV. There are also the blogging networks as well the social networking sites and search engines. finding opportunities for exploiting an idea is sizeable together with remote.5 Royalty payments and capitalization o 8.1 Equity joint ventures o 7.3 Automatic licensing and administered licensing o 8. there are risk-takers.7 Articles of Association 9 Dissolution 10 See also 11 References 12 External links
[edit] Finding ideas or partners
In the era of the Internet.2 Cooperative joint ventures o 7. Although they typically exit once an idea or an opportunity proves itself. Wikipedia.1 Introduction o 8.4 Foreign Investment Companies Limited By Shares (FICLBS) o 7. angel investors and venture managers (See Carried Interest [3] – especially in the high-tech industries like IC chips or biotechnology. or advertised.Contents
[hide]
• • • • • • •
•
• • • •
1 Finding ideas or partners 2 Preparation 3 Partner selection 4 Feasibility study 5 Company incorporation 6 Shareholders' agreement 7 Chinese Law o 7.com/index.5 Investment Companies by Foreign Investors (ICFI) 8 Joint ventures in India o 8.2 Liberalization of policy o 8.clickbank. Youtube to name the most obvious. communicating.Venture capitalists. websites such as http://www. But finding an entrepreneur for a JV is another task! Nonetheless. Forming JVs with distributor and marketing agencies is possible in this flat world to market a product.3 Wholly Foreign Owned Enterprises (WFOEs) o 7.html and the plain newspaper advertising of opportunities.
. One should not forget websites which have become prosperous like eBay and Amazon.4 Joint venture companies o 8.6 India's legal system o 8. exhibitions.com.

In an Opalesque. transport and warehousing. at the same time. including the amount of investment and financing arrangements and debt the JV(s) products. One can here only underline the steps or information that will be needed by the JV candidate. by-products and waste.TV video. often the deciding body for the formation of a JV or dispute settlement. estimated technology transfer costs foreign exchange projections ( where applicable) staff requirements and training financial projections environmental impact social benefit
[edit] Partner selection
While the following offers some insight to the process of joining up with a committed partner to form a JV. especially in approaches to government. including output projections. The emergence of these joint ventures continues the trend of alternative investments becoming a larger piece of traditional portfolios. it is often difficult to determine whether the commitments come from a known and distinguishable party or an intermediary.supply. their technical description and usage alternate production technologies estimated cost of equipment estimated product price(s) costing market analysis for the product.. utility. one which needs a lot of work and yet. The ideal process of selecting a JV partner emerges from:
•
screening of prospective partners
.Joint ventures have also become more prominent in the world of alternative investments since the financial crisis began in 2007. structure and projected form of the joint venture. inside and outside the ‘territory’ analysis of competition projected sales and methods of distribution details of offered site. They are [4]
• • • • • • • • • •
• • • • • •
the objectives.
[edit] Preparation
Formulating the JV is a series of steps. testing and quality control. This is particularly so when the language barrier exists and one is unfamiliar with local customs. precision. and transport requirements. Tim Krochuk of hedge fund GRT Capital Partners describes how hedge funds have begun teaming up with traditional long-only asset managers in joint ventures to provide alternative capabilities to existing traditional asset management firms.

by its strength and weakness factors (for the economy or the country) in aspects as:
. management contracts. one 'packaged' with technology contracts (knowhow. They dissolve the JV when that goal is reached. except to say there are many in India. along with the Articles which will regulate it. for 'one-time' contracts.
[edit] Feasibility study
A nascent JV project outlines:
• • • • • • • • • • • • • • • •
the partners the objectives and structure of the JV investment and financing arrangements product(s)and description and usage. for construction projects.g. Further consideration relates to starting a new legal entity ground up. trademarks and copyright). patents. Such an enterprise is sometimes called 'an incorporated JV'.is assessed (in terms of Government control over the JV) by considering it. technical services and assisted-supply arrangements. rental agreements. e. franchise and brand use agreements. It would be out of place to describe them. The consortium JV (also known as a cooperative agreement) is formed where one party seeks technological expertise or technical service arrangements. and transport requirements foreign exchange projections staff requirements and training
Its feasibility. utility. output production technology equipment required and costs technology transfer costs cost-benefit analysis market analysis analysis of competition details of the site transport and warehousing by-products and waste supply. besides its profitability. These companies may be 'public' or 'private' companies.• • • • •
short listing a set of prospective partners and some sort of ranking ‘due diligence’ – checking the credentials of the other party availability of appreciated or depreciated property contributed to the joint venture the most appropriate structure and invitation/bid foreign investor buying an interest in a local company
Companies are also called JVs in cases where there are dominant partners together with participation of the public. There may also be cases where the public shareholding is substantial but the founding partners retain their identity..

The Articles of Incorporation is again a regulation of the Directors by the stock-holders in a company.copyrights in case of IT) limits imposed (by its supplier) on the use or non-use of the technology. Together with the Articles of Association. It may be viewed by the public at the office in which it is filed. it forms the 'constitution' of a company in these countries. It deals with the powers relegated by the stockholders to the Directors and those withheld by them.and in many Common Law countries . etc. value to national economy and other contributions (i. who might otherwise be giant corporations. and it has a separate liability from that of its founders. except for invested capital
.its appropriateness to the national infrastructure. A sample can be seen at http://upload.labor intensity. It is a statutory document which informs the outside public of its existence. the State where it is incorporated) and in countries following the practice.
[edit] Company incorporation
A JV can be brought about in the following major ways:
• • • •
Foreign investor buying an interest in a local company Local firm acquiring an interest in an existing foreign firm Both the foreign and local entrepreneurs jointly forming a new enterprise Together with public capital and/or bank debt
In the U. exports. the 'constitution' is a single document.wikimedia. even amongst the emerging countries the JV can contract in its own name. acquire rights (such as the right to buy new companies).e. A Certificate of Incorporation[5] or the Articles of Incorporation ( see sample at [6] ) is a document required to form a corporation in the US ( in actuality. environment factors.pdf. know-how.K and India . "greeness" of the technology).org/wikipedia/meta/5/5f/Wikimedia_UK__Memorandum_of_Association. patents. In the US.• •
• • • •
the quality of the technology .a joint-venture(or else a company formed by a group of individuals)must file with the appropriate authority the Memorandum of Association. waste-treatment and disposal capability of recipient to absorb the technology cost of the technology and competitiveness supporting strengths (trademarks. requiring the passing of Ordinary resolutions. By its formation the JV becomes a new entity with the implication:
• • •
that it is officially separate from its Founders. The Articles of Association regulate the interaction between shareholders and the Directors of a company and can be a lengthy document of up to 700000 + pages. utility usage. Special resolutions and the holding of Extraordinary General Meetings to bring the Directors' decision to bear.

On the receipt of the Certificate of Incorporation a company can commence its business. Whether the Board controls or the Founders.whether the board manages or a founder transferability of shares . This repeats the Shareholders Agreement as to the number of Directors each founder can appoint to the (see Board of Directors). Though dealt with briefly in shareholders’ agreement in Wikipedia.the conditions. Some of the issues in a shareholders' agreement are:
• • • • • • • • •
Valuation of intellectual rights. particularly on the enforceability of 'heads of' or shareholder agreements. sometimes its ‘puts’ and ‘calls’.say. etc. Normally. extent of debt. the deployment of funds of the firm.
. The taking of decisions by ‘simple’ majority of those present or a 51% or 75% majority with all Directors present (their Alternates/proxy). (also see samples in. The other basic document which must be articulated is the Articles which is a published document and known to members. Also. one of the partner dies. it requires no submission to any authority. a JV may elect to stay as a JV alone in a ‘quasi partnership’ to avoid any nonessential disclosure to the Government or the public. the proportion of profit that can be declared as dividends. say.•
it can sue (and be sued) in courts in defense or its pursuance of its objectives. the real estate of the other the control of the Company either by the number of Directors or its "funding" The number of directors and the rights of the founders to their appoint Directors which shows as to whether a shareholder dominates or shares equality.[7][8]) some issues must be dealt with here as a preamble to the discussion that follows. management decisions .percentage of profits to be declared when there is profit winding up .the valuations of the IPR of one partner and . notice to members confidentiality of know-how and founders' agreement and penalties for disclosure first right of refusal . Also. the ‘first right’ of refusal if the firm is sold. It is done in parallel with other activities in forming a JV.
There are many features which have to be incorporated into the Shareholders Agreement which is quite private to the parties as they start off. For some legal reasons it may be called a Memorandum of Understanding.
[edit] Shareholders' agreement
This is a legal area and is fraught with difficulty as the laws of countries differ. Also significant is what will happen if the firm is dissolved.purchase rights and counter-bid by a founder.assignment rights of the founders to other members of the company dividend policy . There are also many issues which are not in the Articles when a company starts up or never ever present.

5 billion in direct foreign investment.Sino-Foreign Co-operative Joint Ventures (CJVs). Since Mao Zedong initiatives in foreign trade began to be applied. Under Chinese law. to exceed the USA. Of these five will be described or mentioned here: three relate to industry and services and two as vehicles for foreign investment. or rights to appoint the Chairperson and Vice-chair of the Company.Often the most successful JVs are those with 50:50 partnership with each party having the same number of Directors but rotating control over the firm. and Law applicable to foreign direct investment was made clear in 1979.000 foreign investment enterprises. It is incorporated in both Chinese (official) and in English (with equal validity). Also. They are the Sino-Foreign Equity Joint Ventures EJVs) .[12] The corpus of the law has improved since then. Companies with foreign partners can carry out manufacturing and sales operations in China and can sell through their own sales network.
[edit] Equity joint ventures
The EJV Law is between a Chinese partner and a foreign company. [10] The US had 45000 projects ( by 2004) with an in-place investment of over 48 billion
[11]
Until 1949. it approved the establishment of near 500. (See also [9] ) Recently.
[edit] Chinese Law
It is interesting to study the JV laws of China because they are of recent vintage and because such a unique law exists. Prior to
. in a major case the Indian Supreme Court has held that Memorandums of Understanding (whose details are not in the Articles of Association) are "unconstitutional" giving more transparency to undertakings. making it the world’s largest recipient of direct foreign investment for the first time. the Law pertaining to Wholly Foreign-Owned Enterprises (WFOE) (although they do not strictly belong to Joint Ventures) and the Investment Laws pertaining to foreign investment companies limited by shares (FICLBS) and Investment Companies through Foreign Investors (ICFI). China was the recipient of US$ 53. no guidelines existed on how foreign investment was to be handled due to the restrictive nature of China toward foreign investors. The first Sino-foreign equity venture took place in 2001 . According to a report of the United Nations’ Conference on Trade and Development 2003. Sometimes a party may give a separate trusted person to vote in its place proxy vote of the Founder at Board Meetings. with limited liability. foreign enterprises are divided into several basic categories. Foreign-Sino Companies have export rights which are not available to wholly Chinese companies as China desires to import foreign technology by encouraging JVs and the latest technologies.

draws a penalty. The other format of the CJV is similar to a partnership where the parties jointly incur unlimited liability for the debts of the enterprise with no separate legal person being created. minimum equity must be US$5 million and at least 40% of the investment. the partners share profits. The CJVs may have a limited structure or unlimited – therefore. between US$10million and US$30million. The limited liability version is similar to the EJVs in status of permissions . the status of the formed enterprise is that of a legal Chinese
. between US$3million and US$10million. losses and risk in equal proportion to their respective contributions to the venture’s registered capital.
There are also intermediary levels. In the EJV mode. The minimum equity is prescribed for investment (truncated) [13] (also see [14]: Where the foreign equity and debt levels are :[15]
• • • •
less than US$3million.China’s entry into WTO – and thus the WFOEs – EJVs predominated. The ‘timing’ of investments must be mentioned in the Agreement and failure to invest in the indicated time. more than US$30 million. Co-operative Enterprises are also called Contractual Operative Enterprises. etc. The JV contract accompanied by the Articles of Association for the EJV are the two most fundamental legal documents of the project. there are two versions.1 million and at least 50% of the investment. equity must constitute 70% of the investment. buildings. However. In case of conflict the JV document has precedence These documents are prepared at the same time as the feasibility report.the foreign investor provides the majority of funds and technology and the Chinese party provides land. equipment. No minimum investment is set for the Chinese partner.
[edit] Cooperative joint ventures
Co-operative Joint Ventures (CJVs) [16] are permitted under the Sino-Foreign Cooperative Joint Ventures. minimum equity must be US$12 million and at least 1/3 of the investment. there are no minimum limits on the foreign partner which allows him to be a minority shareholder. The Articles mirror many of the provisions of the JV contract. minimum equity must be US$2. These escalate upwardly in the same proportion as the increase in registered capital. In both the cases. There are also the ancillary documents (termed "offsets" in the US) covering know-how and trade-marks and supply of equipment agreements. The foreign investment in the total project must be at least 25%.

voting. Not being a JV. as well as methods of recourse associated with equipment leases and service contracts. Foreign partners can often obtain the desired level of control by negotiating management. CJV or WFOE prepare a feasibility study outlined above.[17] During the term of the venture. This proportion also determines the control and the risks of the enterprise in the same proportion. giving the option tot the foreign investor.person which can hire labor directly as. provided the contract prescribes that and all fixed assets will become the property of the Chinese participant on termination of the JV. however. under a contractual arrangement.
[edit] Wholly Foreign Owned Enterprises (WFOEs)
The basic Law of the PRC Concerning Enterprises with Sole Foreign Investment controls WFOEs. It may be possible to operate in a CJV in a restricted area A CJV could allow negotiated levels of management and financial control. the land stays in the possession of the Chinese partner. not necessarily in proportion to capital contribution. He uses the Chinese partner’s business license.
. they are only considered here only in comparison or contrast. There is another advantage: the percentage of the CJV owned by each partner can change throughout the JV’s life. China’s entry into the World Trade Organization around 2001 has had profound effect on foreign investment. and staffing rights into a CJV's Articles. Other differences from the EJV are to be noted:
• •
• •
•
•
A Co-operative JV does not have to be a legal entity. for example. EJV. it becomes possible to merge with a Chinese company for a quick start. In an EJV management control is through allocation of Board seats. The feasibility study must cover the fundamental technical and commercial aspects of the project before the parties can proceed to formalize the necessary legal documentation. a Chinese national contactor. the foreign participant can recover his investment. It is therefore easier to find co-operative partners and to reach an agreement. obtains a faster rate of return with the concurrent wish of the Chinese partner of a later larger role of maintaining long term control The parties in any of the ventures.[18] (submissions by the Chinese partner).
Convenience and flexibility are the characteristics of this type of investment. It is a non-binding document . since control does not have to be allocated according to equity stakes. by holding higher equity. The partners in a CJV are allowed to share profit on an agreed basis. The minimum of the capital is registered at various levels of investment. Under the CJV. With changes in the law. The study must contain details referred to earlier under Feasibility Study.the parties are still free to choose not to proceed with the project. A foreign investor does not need to set up a new corporation in China.

8 34. Managers. In this it is more similar to a CJV than an EJV. China publishes from time to time updated versions of {| class="wikitable" |-its ‘Catalogs for the Guidance of Investments’ (affecting all ventures) . and Suppliers depends on the rules which govern the Departments or Ministries which control product liability. rent buildings.3 60.To implement WTO commitments.% 15.1 1.8 EJV. including debt. The capital is composed of value of stock in exchange for the value of the property given to the enterprise. As such. The minimum amount of the registered capital of the company should be RMB 30 million.9 9.6 7.6 26.9 50.)** 1735 1589 1595 1547 996 (*)=Financial Ventures by EJVs/CJVs (**)=Approved JVs
[edit] Foreign Investment Companies Limited By Shares (FICLBS)
These enterprises are formed under the Sino-Foreign Investment Act. is equal to the amount of shares purchased by each partner. As of the 3rd Quarter 2004 the WFOEs had replaced EJVs and CJVs as follows [19] : Distribution Analysis of JV in Industry . The WFOE is a Chinese legal person and has to obey all Chinese laws.8 1. Advisers. These companies can be listed on the only two PRC Stock Exchanges – the Shangri and
.9 12.8 1. worker safety or environmental protection.the areas in which investment which is prohibited. WFOEs are typically limited liability enterprises (like with EJVs) but the liability of the Directors. The liability of the shareholders. An advantage the WFOE enjoys over its alternates is the protection to its know-how but a principal disadvantage is absence of an interested and influential Chinese party. encouraged and restricted.4 2. with all of the investment is to be wholly provided by the foreign investor and the enterprise is within his total control.PRC Type JV 2000 2001 2002 2003 2004 (3Qr) WFOE 46.% 35.4 66.2 Misc JV* 1. All foreign investments which are absent in the list are permitted. it is allowed to enter into contracts with appropriate government authorities to acquire land use rights. WFOEs are expected by PRC to use the most modern technologies and to export at least 50% of their production.4 29.2 5.1 CJVs (No. and receive utility services. The registered capital of the company the share of the paid-in capital.2 62.7 20.9 CJV.

Type A are only to be used by Chinese nationals and can be traded only in RMB.
[edit] Joint ventures in India
[edit] Introduction
India’s has an open philosophy on capital markets and it closely parallels its English peers in operation. “A” shares are issued to and traded by Chinese nationals. Further. English is one of the preferred languages of the market and its policies are first announced in English.
[edit] Investment Companies by Foreign Investors (ICFI)
Brief coverage is provided. The shares subscribed and held by foreign Investment Companies by Foreign Investors (ICFI) should be 25%. From March 2001. in addition to foreign investors. Furthermore. The Indian people are skilled and entrepreneurial by nature as evident in world markets but in India less than 1% of its billion population at present – that is. and trades in several thousand more. The paid-in capital contribution has to exceed $ 10 million. Chinese nationals with foreign currency can also trade “B” shares. The Bombay Stock Exchange (BSE) has close to 5000 listed shares. Type “B” shares are denominated in Remembi but can be traded in foreign exchange and by Chinese nationals having foreign exchange. Investment Companies are those established in China by sole foreign-funded business or jointly with Chinese partners who engage in direct investment.[20] The National Stock Exchange is the other exchange at present. It has to be incorporated as a company with limited liability. State enterprises which have been approved for corporatization can trade in Hong Kong in “H” share and in NYSE exchanges. only 11 million people – representing 3% of households invest in the market. more than 3 project proposals of the investor's intended investment projects must have been approved. making it the largest stock exchange in the world. They are issued and traded in Renminbi. India is one of three countries that has
. Shares of two types are permitted on these Exchanges – Types “A” and Type “B” shares. “B” shares are denominated in Renminbi but are traded in foreign currency. The total amount of the investor's assets during the year preceding the application to do business in China has to be no less than US $ 400 million within the territory of China.Shenzhen Stock Exchanges.[21] People who ‘work’ the market in other languages are adept in recognizing concepts in derivatives and futures and trade in them. The investment firm can be established as an EJV.

But. The Indian currency – the Rupee – is 100% convertible for ‘’ earnings’’ at free market rates.[22] India does not restrict the repatriation of investments. and those in which investment initiatives would ordinarily emanate from private entrepreneurs. Industrial policy divided industry into three categories:
• • •
those that would be reserved for public sector development. the reformed New Industrial Policy (NIP). deregulated industrial licensing. one of six that has satellite launching facilities and has over 100 Fortune 500 companies doing R&D in the country. The restrictive Foreign Exchange Regulation Act (FERA) was replaced by the Foreign Exchange Management Act (FEMA). profits and if need be. but giving the public sector a dominant position. agriculture.8 billion in 2007–08. while shrinking the Public Sector.through the single autonomous entity.[26] It and later modifications (further liberalization) streamlines procedures. To counteract these effects a new policy was born in July 1991. lottery business.[23][24]
[edit] Liberalization of policy
India’s basic outlines of industrial development were framed by Pandit Jawaharlal Nehru in 1956 making the private sector a participant in development. and vastly expanded the role for the private sector. Also. also. atomic energy. India’s new policies (described below) have resulted in aggregate foreign investment flowing into India increasing from US$103 million in 1990-91 to US$61.supercomputers. as did the European economy..
. roads or bridges are on the ‘’’negative’’’ list for foreign participation.[25] However. the principal .. the pace of the ‘Asian tigers slowed. agricultural or plantation activities housing and real estate business (except development of townships). those under private enterprise with or without State participation. the Reserve Bank of India (RBI). anti-trust laws ( the Monopoly and Restrictive Practices Act) were trimmed and customs duties for industrial goods slashed.
Only six industries are exclusively ‘reserved’ for the public sector. the country’s balance of payments crisis. and retail construction of residential/commercial premises. by the early 1990s the situation in the world economies turned: Japan entered a phase of stagnancy of growth. Trading (except single-brand retailing). gambling & betting. dividends.

Promoter shareholder of an existing Indian company and a third party.
[edit] Joint venture companies
JV companies are the preferred form of corporate investment but there are no separate laws for joint ventures. one of them non-resident or both residents. NRI (Non-Resident Indians). who/which may be individual/company.[27] Briefly. India allows investments both through Foreign Direct Investment (FDI). Even in sectors limited to 51%. is feasible if approach is made to the Foreign Investment Promotiomn Board (FIPB) – thus. Investments up to 100% are allowed in power generation.
•
•
. Foreign Institutional Investors ("FII’s) from reputable institutions (like pension funds. collaborate to jointly carry on the business of that company and its shares are taken by the said third party through payment in cash. The other party subscribes for the shares in cash. in cash. It is administered through FIPB .
•
The above two parties subscribe to the shares of the JV company in agreed proportion. Companies which are incorporated in India are treated on par as domestic companies . a higher level of control. RBI approvals come within two weeks for the invested entity. For another 36 ‘’ sectors’’ there are varying limits ‘’without output restrictions’’. meant for long-term controlling investments and Portfolio Investment – taking a position by buying shares of a company – which is likely short-term capital market operation. "administered’’-licensing. Investments can flow to the country prior to approvals for such cases. (individuals or companies). an Export Oriented Unit (EOU) in the EPZ's. Industrial approvals are ‘’ automatic ‘’ (RBI approval of investment) for most manufacturing industries with equity investment up to 51% foreign control and as of 1997 to 74% in certain select industries ( See the current policy highlighted above). electronics. coal washeries. and start a new business. incorporate a company in India. Business of one party is transferred to the company and as consideration for such transfer. and OCBs (Overseas Commercial Bodies) have relaxed accommodation Industrial licensing of the 1951 policy is applicable to “Annex II” (not shown here) industries which revolve around certain key natural resources.[edit] Automatic licensing and administered licensing
India’s investment policy as of April 2010 is presented at the site. up to 74%. Two parties. mutual funds) may (and do) participate in the Indian capital markets. PIO (People of Indian Origin). shares are issued by the company and subscribed by that party.

This lies outside this discussion. while aggregate foreign institutional investment (FII) in an enterprise is capped at 24 percent. no upper limit) are allowed [28] in India together with and public companies. lying outside of this discussion – Hindusthan Unilever-Unilever. incorporated in India or not. also an autonomous body. However. Bharti Airteli-Singapore Telecom. while the Indian partner makes available the factory or building site and locally made machinery and product parts. The total investments made are to a tune of around $1. Whirlpool. Through capital market operations ‘’foreign’’ companies can transact on the two exchanges without prior permission of RBI but they cannot own more than 10 percent equity in paid-up capital of Indian enterprises. ITC-Imperial Tobacco.2% in installed nuclear capacity during 2008–20. It is expected that in a JV. The country has set an imposing target of achieving an installed capacity of 20 GW by 2020 and 63 GW by 2030. However. Sometimes. Under the country’s laws. and the unit loses its ‘smallness’ and requires an industrial license. P&G Home Products.[30] JVs are expected in the nuclear industry following the NSG waivers for nuclear trade. likewise with partnerships. if the M&As are in sectors and activities requiring prior government permission (Appendix 1 of the Policy) then transfer can proceed only after permission. of India (Maruti Motors).Private companies ( only about $2500 is the lower limit of capital. having financial participation with the financial institutions and the lay public which are monitored by SEBI (Securities and Exchange Board of India). limited or not. sole proprietorship too are allowed. The establishment of wholly owned subsidiaries (WOS) and project offices and branch offices. the latter are reserved for NRIs.30 billion following the Indo-US nuclear deal in 2008. a public company must:
. Equity transfer from residents to nonresidents in mergers and acquisitions (M&A) is usually permitted under the automatic route. it is understood. The total size of the Indian nuclear power market will be around $40 billion by 2020 with a growth rate (AAGR) of 9. the foreign partner supplies technical collaboration and the pricing includes the foreign exchange component. that Branches are started to ‘test’ the market and get a its flavor. Suziki-Govt. Many JVs are formed as public limited companies (LLCs) because of the advantages of limited liability.[31] There is a group of industries reserved for the small scale sector wherein foreign investment cannot exceed 24% and if does then approval is necessary from the FIPB. The nuclear power industry has been witnessing several JVs.[32] There are many JVs.[29] Joint ventures with trading companies are allowed together with imports of secondhand plants and machinery.

’’ ‘’without’’ any restriction on the duration of the royalty payments’’. etc. RBI allows [33]: Lump sum payments ‘’not’’ exceeding US$ 2 million.. Royalty payable is limited to 5 % for domestic sales and 8 % for exports.
[edit] India's legal system
India is a common law country with a written constitution. Hold statutory meetings
There are several other provisions contained in the Companies Act 1956 which also need to be followed. The country has recently enacted the Arbitration and Conciliation Act. The royalty is calculated on the basis of the net ex-factory sale price of the product. 1996 ("New Law"). minus the cost of the standard bought-out components and the landed cost of imported components.
.• • • • • •
Have at least seven shareholders Have at least three directors Obtain government approval for the appointment of its management. Issue of equity shares against lump sum fees and royalty fees is permitted. For exceeding this norm. Have both a "trading certificate" and certificate of incorporation before commencing its business. Publish also a prospectus (or file a statement) before it can start transact business. The New Law is based on the United Nations Commission on International Trade Law (UNCITRAL) Model Law on International Commercial Arbitration ("Model Law.
[edit] Royalty payments and capitalization
For the automatic route. There is a single hierarchy of courts. custom duties. guaranteeing individual and property rights. the firm has to approach FPBI. irrespective of the source of procurement. insurance. Payments are made through RBI. exclusive of excise duties. including ocean freight. Arbitration can be in India or International Commercial Arbitration.[34] All agreements are under Indian laws. The royalty limits are net of taxes and are calculated according to standard conditions.

The Directors may or may not be employees
. it can cover:
• • • • • • • • • •
Valuation of intellectual rights.the conditions. and others say. the Board of Directors (BOD).say. Some clauses relating to the following may be absent. It is a set of 'bye-laws' which form the 'constitution' of the Company. directors meetings .whether the board manages or a founder transferability of shares . say. The Chairperson is generally a well-known outsider but he /she may be a working Executive. and day-to-day working. Each usually has the right to nominate. mot all of which is required in a country's law.the valuations of the IPR of one partner and. without objection of the other. The Directors may or may not be employees of the Company.percentage of profits to be declared when there is profit winding up .purchase rights and counter-bid by a founder. but for convenience. notice to members confidentiality of know-how and founders' agreement and penalties for disclosure first right of refusal .the quorum and percentage of vote management decisions .[edit] Articles of Association
Introduction The Articles of Association determine how a company is run. There are usually some major shareholders who form the company.persons not associated with the promoters of the company. The typical Articles in an Indian Public Sector Company are given in. it is assumed that the provisions as laid out in the in Company Law apply. by the Directors. person is generally a well-known outsider but he /she may be a working Executive.Venture agreement . The shareholders elect the directors at the Annual General Meeting (AGM). explicitly. The number of directors depends on the size of the Company and statutory requirements.
Some agreements mention that the Articles of Association as given in Company Law apply to the agreement except where specifically differing. Shareholders can also elect Independent directors . Thus.and mode of election dividend policy . Where this the case. The Treasurer and Chairperson is usually the privilege of one of the JV partners (which nomination can be shared).which shows whether a shareholder dominates or shares equality.assignment rights of the founders or other members of the company special voting rights of a Chairman. which is statutory. The Articles can cover a medley of topics. typical of an American enterprise. certain number of directors who become nominees for the election by the shareholder body at the AGM. Although all will not be discussed. that they do not bind that the agreement and that it contains all legally acceptable bye-laws.[35] A Company is essentially run by the shareholders. It is often required by Law to be part of the Joint.the real estate of the other The appointments of directors .

the various Resolutions are put to vote. or EGM. The matters which require the Ordinary and special resolution to be passed are enumerated. At each meeting there is an 'agenda' before it. by a count of votes. it is done. Some votes maybe for the decision.they may have to view the Objectives of the Company and competitive position. The Chair may have to 'break' the vote if there is a 'tie'. Two types of decision known as the Ordinary resolution and the other a special resolution can be tabled at a Director's Meeting: The Ordinary Resolution requires the endorsement by a majority vote. its Head. A typical Articles of Association is shown in the Nestle S. It cannot be changed except at an AGM or Extraordinary General Meeting (EGM) and statutory allowance.Office. The shareholders play no part till the next AGM. by the Vice-Chair. Shareholders other than partners are required to vote. The Directors who are the electives of one major shareholder. At the AGM. Each share carries the votes assigned to it. The MOA is generally filed with a 'Registrar of Companies' who is an appointee of the Government.for public access. an Auditor is elected at each AGM. If the quorum requirement is not met . The Board meets several times each year.70 or 80% of the vote as stipulated by the 'constitution' or the very same bye-laws of the Company. the BOD manages the Company.which denotes the name of the Company. The AGM is called with a notice sent to all shareholders. A minimum number of Directors (a quorum) is required to meet. or Nestle Ltd
. unlimited by the quorum. A person who is not a shareholder of the Company can vote if he/she has the 'proxy'. may present his/her view but this is not necessarily so . The Chair is always present. others not. The Directors survey their area of responsibility. If it at that too a quorum is not met. Where decisions are made by a show of hands is challenged.A. The special resolution requires 60.Once elected. it is canceled and another Meeting called. This is either determined by the 'bye-laws' or is statutory. at an EGM. Voting can be taken in person or by marking the paper sent by the Company. its Directors and the main purposes of the Company . It is Presided by the Chairperson or in his absence. sometimes easily met by partners' vote. a Third Meeting is called and the members present. Decisions are taken by a show of hands. take all decisions. The MOA is currently dispensed with in many countries. an authorization from the shareholder. The Objectives and the purpose of the Company are determined in advance by the shareholders and the Memorandum of Association (MOA) . A certain quorum of shareholders are required to meet. They may determine to make a 'Resolution' at the next AGM or if it is an urgent matter. For their assurance the shareholders.

If it is unfriendly. acquisition and merger
Answer
Basically. the company taking over gets to make all the final decisions. the purchase is called an acquisition. Sometimes there are losses of jobs. joint ventures or strategic alliances. a joint venture is when two or more companies make an agreement to do business in one specific area.at least. When one company takes over another and clearly established itself as the new owner. joint venture . Two companies together are more valuable than two separate companies . They are used interchangeably in a lot of news items and conversations but in theory they are different and it is essential to understand the difference. but not all. Those decisions are specified in the merger contract well in advance of the deal.and strategic Alliance
As a business professional or an MBA student.com/Q/Difference_between_joint_ventures_and_mergers_acquisition s#ixzz1YvsqPhna
Difference between merger . It is usually a short lived collaboration. acquisitions.Difference between jointventure . An acquisition is when one company is buying and taking over another. often the seller can stipulate who keeps their job and so forth. shipping and liability costs and produce higher profits. They can share the insurance. If it is friendly. Mergers and Acquisitions : Mergers and acquisitions are more popular form of partnerships which is more simple to understand.answers. From a
. But most of us would not know the exact difference between these words. that's the reasoning behind M&A. A merger is when two companies come together to form a single company. Read more: http://wiki. They combine their respective resources. you would have frequently encounter the words like mergers. They cannot take away benefits already earned.

the target company ceases to exist. Strategic Alliance : SA is a kind of partnership between two entities in which they take advantage of each other’s core strengths like proprietary processes.the resulting company is a new independent company with its own set of executives and even name. and an executive team. research. Oracle acquired Siebel. the buyer "swallows" the business and the buyer's stock continues to be traded. agree to go forward as a single new company rather than remain separately owned and operated. This new company will "do business" with the founding entities-usually as suppliers. but owned by the founding participants. Oracle acquires companies and not merge with them.Oracle Corporation is very famous for its acquisitions. For example.Peoplesoft and more recently SUN through friendly or hostile take overs. e. you'll have a completely new entity with a board. A merger happens when two firms. Effectively a JV is a completely new organization.
Mergers vs strategic alliances vs joint ventures Joint Venture : A joint venture is a legal partnership between two(or more) companies where in they both make a new (third) entity for competitive advantage.legal point of view. often of about the same size. In both the above cases. The board of directors generally is constructed with representatives of the founding organizations. intellectual capital. officers.g.BEA. With a JV you will have something more than simple governance. They will have an open door relationship with another entity
." Both companies' stocks are surrendered and new company stock is issued in its place. manufacturing and/or distribution capabilities etc. This kind of action is more precisely referred to as a "merger of equals. Uninor was a joint venture between Unitech(India) and Telenor(France) and KPIT Cummins is a joint venture between KPIT and Cummins Infosystems. They share their core strengths with each other. market penetration.

"Our association and we say this on behalf of both Lux Industries Ltd. "Presently it has come to our attention that the sentiments of a group of people in Kolkata have been hurt due to the personal affairs of individuals associated with one of the parties to the association. was supposed to be associated with KKR's apparel merchandising. Lux Industries and KKR have decided to put their association on hold until issues are resolved and the sensitivities of the aggrieved group are adequately addressed. owned by Ashok Todi. both. The Todis were charged with abetting the suicide of computer graphics designer Rizwanur Rehman after he married Ashok Todi's daughter Priyanka." stated the release.g.and will mostly retain control. was never intended to hurt any sentiments or disturb any sensibilities. and KKR. e. HP and Oracle had a strategic alliances wherein HP recommended Oracle as the perfect database for their servers by optimizing their servers as per Oracle and Oracle also did the same. a deal that had earned widespread criticism and anger among the people of the city.
SRK rejects Lux Cozi sponsorship for KKR
KOLKATA: The Kolkata Knight Riders has put on hold its tie-up with hosiery brand Lux Cozi. and not as a legal partnership. "Respecting the sentiments of Kolkata and people of Bengal." the Shah Rukh Khanowned franchisee stated in a release on Monday. The length of agreement could have a sunset date or could be open-ended with regular performance reviews. However. As per the link-up. The Lux Hosiery had also signed the Bollywood star as their brand ambassador. they simply would want to work with the other organizations on a contractual basis.
. the innerwear brand. an accused in Rizwanur Rahman suicide case.

A criminal case has been registered with the Todi brothers who are currently on bail. SRK in his last visit to the city had met Todis as the deal had come up sparking anger in various parts of the city. In fact, the Imam of Kolkata's second biggest mosque had written to Khan, appealing to scrap the deal. "The association was worked upon, on the basis of the fact that, Lux Industries Ltd is a company doing business successfully in India and based in Kolkata for more than last 50 years. "The association was truly professional and offered a sound synergic alliance between the two organizations. No matters concerning individuals associated with the respective organisations were envisaged as this was a purely professional tie-up." "Having said the above, we again reiterate that this a professional association that perhaps does not merit to be judged on any personal fronts, but our love and respect for the sentiments of our fellow Kolkatans drives us to put on hold any further activity with regard to our association, till such time an acceptable resolution to the situation is arrived at." "We sincerely hope that our effort to redress this grievance is positively received and this may bring to end any strife, hurt or anguish caused to anyone who has raised their displeasure in this matter," added the release. The KKR jersey of black and gold colour has been changed with designer Manish Malhotra bringing purple into it even as the gold lining continues to exist. The Kolkata side had finished last in the second edition, while in the inaugural IPL edition the side had finished second last. The third edition of the T20 extravaganza will be held from April 12-March 25

Wall Street Exchange Company LLC, has announced a tie-up with State Bank of India, India's largest bank, for quick money transfer to any part of India through 5,800 branches, under the Speed Remittance facility, 'SBI Express', under which the amount will be credited to beneficiary accounts within 24 hours/ the next working day.

The agreement brings together two major players in the remittances market for providing Draft & TT drawing arrangements and Direct Credit to accounts through 'SBI Express'. "As many Indian expatriates hold accounts with State Bank of India, the tie-up will be of great benefit to people transferring money to India," said Abdullah Bin Ghalib, GMD of Wall Street Exchange. "More importantly, SBI is a giant among Indian banks with a vast network and proven expertise in serving every corner of India." State Bank of India has been a pioneer, be it in the area of Corporate Financing, SME Financing, Rural Banking, Retail Banking, International Banking or NRI Banking. It is the only Indian bank to figure in the list of top 100 World Banks compiled by the Banker Magazine (UK) with a world ranking of 70. It has the largest network of branches and ATMs in every nook and corner of India. It also has the largest network of offices abroad among Indian banks, with 84 offices in 33 countries, thus providing world class banking services across the globe. SBI won the Gold Award for the Most Trusted Brand in Banking Category in India in a recent survey conducted by "Readers Digest". The Bank was also rated No. 1 in Customer Loyalty - ahead of high-profile private and foreign banks - in an IMRB/Business World customer loyalty survey of retail banking. State Bank of India has the largest base of expatriate deposits and market share in remittances among all the banks in India, including the private sector and foreign banks. It is very popular among Indians and Indian expatriates in the Gulf. "The partnership with SBI adds a new dimension to Wall Street's strategy of becoming a leading player in the remittances market," said Mr. Bin Ghaleb. "Supported by the Emirates Post Group's vision, we are set to increase our customer base manifold and we are in the process of finalizing several new partnerships." Tie up As I indicated in an earlier article, there are strong rumours of a "merger" or "tie-up" between Australian carrier Qantas and Malaysian Airlines (MAS). Given the regulatory stranglehold and national politics involved in Asia, a full merger is next to impossible.

Not only do I feel that this tie-up will happen, I strongly believe that it will result in positive results for all the players, not just the airlines. The future for Qantas is Asia, but either due to a difference in business culture, or national ego, or economic and/or market positions, Qantas really has no serious potential partners in Asia, other than Malaysian. A tie-up with either Singapore Airlines or Cathay Pacific or Japan Airlines and can be written off due to culture or ego reasons. Garuda, Thai, Philippines, Eva, China Air, Air China, or any of the Taiwanese or Chinese airlines are too small or do not offer adequate economic benefits to Qantas. Qantas CEO, Alan Joyce, had said that Qantas was looking to be the senior partner in any merger or similar relationship that the carrier entered into. The recent failure of the merger talks with British Airways highlights Joyce's desires. Under the able stewardship of Idris Jala, Malaysian has staged a phenomenal comeback. After years of losses, government intervention and its resultant inefficiencies, Jala has moved MAS in to profitability, for the last 3 years. Even until the third quarter of 2008, despite the economic crises, he has delivered profits. Driven by its formidable low cost carrier (LCC) competitor AirAsia, and Jala, MAS has undertaken ruthless cost cutting and route rationalization. Despite this, Jala recognizes, MAS will never meet the cost base of AirAsia, and has moved the airline up the value chain, focusing on the higher end of the market, instead. Article Source: http://EzineArticles.com/1812179

Collaborative software
From Wikipedia, the free encyclopedia This article has multiple issues. Please help improve it or discuss these issues on the talk page.
•

It may contain original research or unverifiable claims. Tagged since
February 2011.

Collaborative software (also referred to as groupware) is computer software designed to help people involved in a common task achieve their goals. One of the earliest definitions for this term was simply: "intentional group processes plus software to support them." (Peter and Trudy Johnson-Lenz [1]). Johansen[2] proposed a matrix from where different sorts of groupware can be found for different types of collaboration classified according two dimensions: time and space. Within the same time and same place collaboration it can also refer to electronic meeting

3 Collaborative management (coordination) tools 4 Collaborative software and human interaction 5 Collaborative project management tools o 5. For the same place & different time or different place & different time it can also include remote access storage systems for archiving common use data files that can be accessed. Within the same time and different place collaboration it can be associated with supporting group processes of individuals not physically co-located. The authors claim that CSCW. According to Carstensen and Schmidt (1999)[3] groupware is part of CSCW. modified and retrieved by the distributed work group members.5 Lists of collaborative software 8 References 9 External links
[edit] Overview
Collaborative software is a broad concept that greatly overlaps with Computer-supported cooperative work (CSCW).
Contents
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1 Overview o 1.1 Groupware and organizations o 2.2 Philosophical Underpinnings 2 Groupware o 2.2 Difference between Collaborative Project Management Tools (CPMT) and Collaborative Management Tools (CMT) o 5.systemss (EMS) or also to group decision support systems(GDSS). and thereby groupware addresses "how collaborative activities and their
. Some authors argue they are equivalent.4 Other related terms o 7.1 Closely related terms o 7.1 Background o 5.1 Origins o 1.3 Dimensions 6 Collaboration software and voting methods 7 See also o 7.2 Design & Implementation Issues 3 Groupware and levels of collaboration o 3. Today's notion of cloud computing provides just the sort of ideal infrastructure from which these group collaboration processes can be supported.2 Groupware type of applications o 7.2 Electronic conferencing tools o 3. via web-based conferencing.1 Electronic communication tools o 3.3 Other related type of applications o 7. but instead working together across an internet connection.

coordination can be supported by means of computer systems". so did the numbers of users and multi-user games. A collaborative working environment supports people in both their individual and cooperative work thus giving birth to a new class of professionals. Studies at MITRE showed the value of voice and text chat. Twitter and Facebook. the first computer network. eprofessionals. The following year. The use of collaborative software in the workspace creates a collaborative working environment (CWE). and held the first public demonstration of his work in 1968 in what is now referred to as "The Mother of All Demos. documented his vision in 1962[6]. Engelbart's lab was hooked into the ARPANET. created the game MUD (MultiUser Dungeon). enabling them to extend services to a broader userbase. intentional or unintentional. online dating services and social networks like Friendster. and bookmarking belong to this category. with working prototypes in full operational use by his research team by the mid 1960s[7]. whether it is formal or informal.[4]. for example. Online collaborative gaming software began between early networked computer users. These would be essential for further development. when personal computers with dial-up modems began to be more common in homes. a student at Essex University in the UK. ARPANET Section on ARPANET Deployed. the more valuable it becomes — applies to these types of software. wiki. It has been suggested that Metcalfe's law — the more people who use something. text chat. A number of other MUDs were created. Parallel to development of MUDs were applications for online chat. As internet connections grew. whenever used for group work. video sharing and voice over IP. largely through the use of multi-line Bulletin Board Systems and online service providers. and the Doug Engelbart Archive Collection.
. collaborative work systems become a useful analytical tool to understand the behavioral and organizational variables that are associated to the broader concept of CSCW. In 1978 Roy Trubshaw. Whereas the groupware or collaborative software pertains to the technological elements of computer supported cooperative work. In 1975 by Will Crowther created Colossal Cave Adventure on a DEC PDP-10 computer.[5]
[edit] Origins
See also: MUD Doug Engelbart first envisioned collaborative computing in 1951Doug Engelbart . whereas the more general term social software applies to systems used outside the workplace."[8]. See also Intelligence Amplification Section 4: Douglas Engelbart. and sharing pictures for shared understanding. but remained a computer science novelty until the late 1980s. calendaring.Father of Groupware. who can work together irrespective of their geographical location. Finally collaborative software relates to the notion of collaborative work systems which are conceived as any form of human organization that emerges any time that collaboration takes place. Software products such as email.

However. In 1998.[11] In 1996. created PlaceWare. MITRE improved on that model by hosting the collaborative session on a server that each user logged into. calling it InfoWorkSpace (IWS). One seminal book on the process of working together from a distance is 'Virtual Teams' by Jessica Lipnack and Jeffrey Stamps. that will mean anywhere. “intentional group processes plus software to support them. Planning and Simulation Strategy (COMPASS). and left as a persistent session that could be joined later. and big companies such as Boeing and IBM started using electronic meeting systems to leverage key internal projects. this allowed the session to be set up in a virtual file cabinet and virtual rooms.[12] The IWS product was sold to General Dynamics and then later to Ezenia.”[16] In the early 1990s the first groupware commercial products began delivering up to their promises. and anyone else who interacts in groups. the new groupware aims to place the computer squarely in the middle of communications among managers." Even further back.[9] One of the first robust applications was the Navy's Common Operational Modeling.[14]
[edit] Groupware
Collaborative software was originally designated as groupware and this term can be traced as far back as the late 1980s. who had built MUDs at PARC. You will be able to work efficiently as a member of a group wherever you have your computer. with side chat between "seat-mates". the collaborative session only remained while at least one user stayed active. their 1978 definition of groupware was. in 1978 Peter and Trudy Johnson-Lenz coined the term groupware. IWS was chosen as the military standard for the standardized Air Operations Center. Pavel Curtis. when Richman and Slovak (1987)[15] wrote: "Like an electronic sinew that binds teams together. Kirkpatrick and Losee (1992)[17] wrote then: "If GROUPWARE really makes a difference in productivity long term."
. Called the Collaborative Virtual Workstation (CVW).[10] The COMPASS system allowed up to 6 users created point-to-point connections with one another. and the ability to invite a limited number of audience members to speak. Lotus Notes appeared as a major example of that product category. as distance increases. allowing remote group collaboration when the Internet was still in its infancy. technicians. In 1997. As computers become smaller and more powerful. revolutionizing the way they work. engineers at GTE used the PlaceWare engine in a commercial version of MITRE's CVW. and would have to be recreated if all six logged out.The US Government began using truly collaborative applications in the early 1990s. rules and protocols need to be implemented.[13]
[edit] Philosophical Underpinnings
See also: Virtual Teams Technology has long been used to bring people together. the very definition of an office may change. a server that simulated a one-to-many auditorium.

Groupware designers do not only have to address technical issues (as in traditional software development) but also consider the social group processes that should be supported with the groupware application. Authentication has always been a problem with groupware. group calendar and instant messaging. When connections are made point-to-point. Closely related to the motivation aspect is the question of reciprocity. These include functionalities such as document sharing (including group editing). among others.which are held by the Association for Computing Machinery Special Interest Group in Computer-Human Interaction biannually. However. Washington in 2012 and the program and the complete conference proceedings from the last conference in 2010 can be consulted here. of when log-in registration is enforced. web conferencing. especially in settings where no pre-defined group process was in place. Since 1984 the great majority of this work has been organized and communicated within the boundaries of a specialized scientific event .0 bringing a host of collaborative features that were originally conceived for within the corporate network. One reason for this is the socio-tecjnical dimension of groupware.
[edit] Groupware and organizations
The study of computer-supported collaboration includes the study of collaborative software and the social phenomena associated with it.As collaborative software evolves and migrates into the Internet itself. Some examples for issues in groupware development are:
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Persistence is needed in some sessions. it contributes to the development of the so called Web 2.the Computer Supported Cooperative Work conferences .
[edit] Design & Implementation Issues
The complexity of groupware development is still an issue. Motivational issues are important. bandwidth issues at fixed location limited full use of the tools.
. There is a wealth of research produced about the impact of groupware in organizations and related social and psychological issues since the early eighties. Chat and voice communications are routinely non-persistent and evaporate at the end of the session. These are exacerbated with mobile devices. Virtual room and online file cabinets can persist for years. it's clear who is engaged in the session.[18][19] Until recently. The next CSCW conference would be held in Seattle. The designer of the collaborative space needs to consider the information duration needs and implement accordingly. audio and unmoderated sessions carry the risk of unannounced 'lurkers' who observe but do not announce themselves or contribute. Ellis and others [20] have shown that the distribution of efforts and benefits has to be carefully balanced in order to ensure that all required group members really participate. Multiple input and output streams bring concurrency issues into the groupware applications.

in order for the team to win. The patterns identify recurring groupware design issues and discuss design choices in a way that all stakeholders can participate in the groupware development process. or documents between people and hence facilitate the sharing of information. Examples include:
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synchronous conferencing asynchronous conferencing e-mail faxing voice mail Wikis Web publishing revision control
[edit] Electronic conferencing tools
Electronic conferencing tools facilitate the sharing of information.but everyone is doing something different . 2. files. Conferencing (or collaboration level. 3. but in a more interactive way. Brainstorming or voting are examples of this.
[edit] Electronic communication tools
Electronic communication tools send messages. data. Examples include:
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Internet forums (also known as message boards or discussion boards) — a virtual discussion platform to facilitate and manage online text messages Online chat — a virtual discussion platform to facilitate and manage real-time text messages Instant Messaging
. That is complex interdependent work toward a shared goal: collaborative management. A phone call or an IM Chat discussion are examples of this. Co-ordination refers to complex interdependent work toward a shared goal. A good metaphor for understanding this is to think about a sports team. Communication can be thought of as unstructured interchange of information.
[edit] Groupware and levels of collaboration
Groupware can be divided into three categories depending on the level of collaboration:
[22]
1. everyone has to contribute the right play at the right time as well as adjust their play to the unfolding situation . as it is called in the academic papers that discuss these levels) refers to interactive work toward a shared goal.One approach for addressing these issues is the use of design patterns for groupware design [21].

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Telephony — telephones allow users to interact Videoconferencing — networked PCs share video and audio signals Data conferencing — networked PCs share a common whiteboard that each user can modify Application sharing — users can access a shared document or application from their respective computers simultaneously in real time Electronic meeting systems (EMS) — originally these were described as "electronic meeting systems.: the construction of a building) social software systems — organize social relations of groups online spreadsheets — collaborate and share structured data and information
Gathering applications This functionality may be included in some wikis and blogs. photos. Primarily includes:
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surveys project management feedback
. or videos between designers. electronic meeting systems have evolved into webbased.g. manage and share information associated with the delivery of a project (e. and clients. customers. organize. and chart the steps in a project as it is being completed online proofing — share. organize. and reject web proofs. manage. share." and they were built into meeting rooms. Wetpaint. any place systems that will accommodate "distributed" meeting participants who may be dispersed in several locations. workflow systems — collaborative management of tasks and documents within a knowledge-based business process knowledge management systems — collect. and search enterprise data prediction markets — let a group of people predict together the outcome of future events extranet systems (sometimes also known as 'project extranets') — collect. review. e. Examples include:
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electronic calendars (also called time management software) — schedule events and automatically notify and remind group members project management systems — schedule. however. approve. any time.
[edit] Collaborative management (coordination) tools
Collaborative management tools facilitate and manage group activities. and share various forms of information enterprise bookmarking — collaborative bookmarking engine to tag. organize. track. These special purpose rooms usually contained video projectors interlinked with numerous PCs. artwork.g.

One participant exchanges money for goods and becomes a customer. The collaboration entity is in a
. part of a suite (such as TikiWiki) or web-based such as Wetpaint. Communication technology such as telephones. with respect to information technology. Transactional interaction involves the exchange of transaction entities where a major function of the transaction entity is to alter the relationship between participants. The transaction entity is in a relatively stable form and constrains or defines the new relationship.
Wikis Either stand-alone (such as MediaWiki). A Wiki might include:
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workflow management blogs image and file galleries chat calendaring surveys
[edit] Collaborative software and human interaction
The design intent of collaborative software (groupware) is to transform the way documents and rich media are shared in order to enable more effective team collaboration.[23] Conversational interaction is an exchange of information between two or more participants where the primary purpose of the interaction is discovery or relationship building.. Collaboration. and e-mail are generally sufficient for conversational interactions. and collaborations. seems to have several definitions. In collaborative interactions the main function of the participants' relationship is to alter a collaboration entity (i. There is no central entity around which the interaction revolves but is a free exchange of information with no defined constraints.e. instant messaging. Some are defensible but others are so broad they lose any meaningful application. Understanding the differences in human interactions is necessary to ensure the appropriate technologies are employed to meet interaction needs. Transactional interactions are most effectively handled by transactional systems that manage state and commit records for persistent storage. There are three primary ways in which humans interact: conversations. transactions.•
time tracking. the converse of transactional).

Collaborative software should support the individuals that make up the team and the interactions between them during the group decision making process. Therefore. An extension of groupware is collaborative media. software that allows several concurrent users to create and manage information in a website.two or more co-equal individuals voluntarily bring their knowledge and experiences together by interacting toward a common goal in the best interest of students' needs for the betterment of their educational success. roles and responsibilities. such as budgets and physical resources. the tangible evidence of the problem solving process. time-management with deadlines and shared calendars. Collaborative software provides areas that support multi-user editing. with some members using their second or third language in communicating with the group. the achievement of a shared goal. threaded discussions. a collaboration platform is a unified electronic platform that supports synchronous and asynchronous communication through a variety of devices and channels.relatively unstable form. Collaborative media models include wiki (Comparison of wiki software) and Slashdot models. Collaboration requires individuals working together in a coordinated fashion. Better solutions record the process and provide revision history. collaboration and the process of problem solving by providing the team with a common means for communicating ideas and brainstorming. This situation provides cultural as well as linguistic challenges for any software that supports the collaborative effort. Accomplishing the goal is the primary purpose for bringing the team together. collaborative software may support project management functions. Brainstorming is considered to be a tenet of collaboration. Some sites with publicly accessible content based on collaborative software are: WikiWikiWeb. audit history. such as virtual whiteboards and chat or other forms of communication. Many of today's teams are composed of members from around the globe. typically require documentation and archiving of the process itself. Collaboration in Education. Additionally. An emerging category of computer software. real collaboration technologies deliver the functionality for many participants to augment a common deliverable. including the final outcome of the collaborative effort. Record or document management. collaborative support systems may offer the ability to support ancillary systems. towards a common goal. The software may also support team membership. the creation of a design. such as task assignments. with the rapid exchange of ideas facilitating the group decision making process. By method used we can divide them into:
. Collaborative software helps facilitate the action-oriented team working together over geographic distances by providing tools that help communication. Additionally. and other mechanisms designed to capture the efforts of many into a managed content environment are typical of collaboration technologies. The artifacts. Examples include the development of an idea. and may involve archiving project plans. deadlines and deliverables. Wikipedia and Everything2.

Since the geographical boundaries broadened the development teams increasingly became more remote changing the dynamics of a project team thus changing the way a project was managed. bridges the gap and can be used simultaneously in Second Life and on the web. planning. this was when the process in which a project's inputs and outputs were carried out started to change with the evolution of the internet.[citation needed] Therefore Welch became a driving force behind not only collaboration between organizations. Former chairman of General Electric. methods recent expansion of corporate use of Second Life and other virtual worlds lead to development of a newer generation of software that takes advantage of a 3D data presentation. development and actualization".
[edit] Background
During the mid-1990s project management started to evolve into collaborative project management. Jack Welch. while yet another type of software. believed that you could not be successful if you went it alone in a global economy. By area served we can divide collaborative software into:
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Knowledge management tools Knowledge creation tools Information sharing tools Collaborative project management tools
[edit] Collaborative project management tools
Collaborative project management tools (CPMT) are very similar to collaborative management tools (CMT) except that CMT may only facilitate and manage a certain group activities for a part of a bigger project or task.
. Document Management System (DMS) and Unified Communication (UC) while CPMT mostly considers business or corporate related goals with some kind of social boundaries most commonly used for project management. Other [1] designed specifically to assist in collaboration when using virtual worlds as a business platform. Some of this software (3D Topicscape) works independently from virtual worlds and simply uses 3D to support user "in concept creation. Collaborative Knowledge Management (cKM). while CPMT covers all detailed aspects of collaboration activities and management of the overall project and its related knowledge areas.• •
Web-based collaborative tools Software collaborative tools
Along with these. but also collaborative project management. already traditional. Another major difference is that CMT may include social software. organization.

There are many dynamics that make project management challenging (coordination. Examples include:
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Electronic calendars Project management systems Resource Management Workflow systems Knowledge management Prediction markets Extranet systems Social software Online spreadsheets Online artwork proofing. According to a survey conducted in 2008 to find out what project managers' expectations and uses of project management
. CMT also includes:
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CPMT facilitate and manage social or group project based activities. collaboration. Choosing the right CPM software is essential to complementing these issues.[edit] Difference between Collaborative Project Management Tools (CPMT) and Collaborative Management Tools (CMT)
Collaborative Project Management Tools Collaborative Management Tools In addition to most CPMT examples. sharing of knowledge and effectiveness of pm's to facilitate the process). feedback. review and approval tool
HR and equipment management Time and cost management Online chat Instant messaging Telephony Videoconferencing Web conferencing Data conferencing Application sharing Electronic meeting systems (EMS) Synchronous conferencing E-mail Faxing voice mail Wikis Web publishing Revision control Charting Document versioning Document retention Document sharing Document repository Evaluation and survey
[edit] Dimensions
Different frameworks could be established based on a project needs and requirements in order to find the best software. The challenge in determining which CPM software to use is having a good understanding of the requirements and tools needed for project development. But the best framework is the one in which the characteristics are so well defined that they cover all the aspects of collaboration activities and management of the overall project.

In the case of decision making. Condorcet voting can combine multiple perspectives in a way that reduces intransitivity. and rankings can be used in various ways such as:
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Producing an average rating.[24] Voting in collaboration software is related to recommendation systems that generate appreciated recommendations based on ratings or rankings collected from many people
What is the difference between Joint Venture. It's worth noting that no matter what voting method is implemented. The votes. rate. ratings.• • •
Document retention Document sharing Document repository
[edit] Collaboration software and voting methods
Some collaboration software allows users to vote. Arrow's Impossibility Theorem guarantees that an ideal voting system can never be attained if there are three or more alternatives that are voted upon. some collaboration software allows participants to add new choices to the list of choices being ranked. Guiding the creation and organization of documents. such as a "top 10" list. often for the purpose of extracting the collective intelligence of the participants. remain unexplored. Making a recommendation that may assist in making a decision. Calculating a popularity ranking. In addition to allowing participants to rank pre-existing choices. such as 4 out of 5 stars. such as voting to determine the sequence of sections in a Wikipedia article. Additional uses of collaborative voting. and rank choices. Collaboration and Merger?
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. such as in Wikipedia where voting helps to guide the creation of new pages.

leaving the larger company intact. s
. Joint control: The contractually agreed sharing of control over an economic activity such that no individual contracting party has control. Mergers are part of Business Combinations. the smaller company will merge into the larger one. A collaboration is a layman's term and is not part of any accounting std. the merged (acquired) company goes out of existence. It just means the coming together of 2 or more parties for the purpose of brainstorming and sharing of expertise. In other words.Best Answer . In a merger. the subject of IFRS 3. two separate companies combine and only one of them survives.Chosen by Asker
IAS 31 defines a Joint venture as A contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control. Usually when two companies of significantly different sizes merge. leaving its assets and liabilities to the acquiring company.